Correlation Between Assurant and CNO Financial
Can any of the company-specific risk be diversified away by investing in both Assurant and CNO Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Assurant and CNO Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assurant and CNO Financial Group, you can compare the effects of market volatilities on Assurant and CNO Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Assurant with a short position of CNO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and CNO Financial.
Diversification Opportunities for Assurant and CNO Financial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Assurant and CNO is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and CNO Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNO Financial Group and Assurant is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Assurant are associated (or correlated) with CNO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNO Financial Group has no effect on the direction of Assurant i.e., Assurant and CNO Financial go up and down completely randomly.
Pair Corralation between Assurant and CNO Financial
Given the investment horizon of 90 days Assurant is expected to generate 1.64 times less return on investment than CNO Financial. But when comparing it to its historical volatility, Assurant is 1.87 times less risky than CNO Financial. It trades about 0.08 of its potential returns per unit of risk. CNO Financial Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,634 in CNO Financial Group on August 26, 2024 and sell it today you would earn a total of 424.00 from holding CNO Financial Group or generate 25.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assurant vs. CNO Financial Group
Performance |
| Timeline |
| Assurant |
| CNO Financial Group |
Assurant and CNO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assurant and CNO Financial
The main advantage of trading using opposite Assurant and CNO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant position performs unexpectedly, CNO Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CNO Financial will offset losses from the drop in CNO Financial's long position.| Assurant vs. American Financial Group | Assurant vs. Aegon Funding | Assurant vs. American Financial Group | Assurant vs. American Financial Group |
| CNO Financial vs. Assurant | CNO Financial vs. Affiliated Managers Group, | CNO Financial vs. The Carlyle Group | CNO Financial vs. Affiliated Managers Group, |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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