Correlation Between American National and FG Annuities
Can any of the company-specific risk be diversified away by investing in both American National and FG Annuities 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 American National and FG Annuities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American National Group and FG Annuities Life, you can compare the effects of market volatilities on American National and FG Annuities 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 American National with a short position of FG Annuities. Check out your portfolio center. Please also check ongoing floating volatility patterns of American National and FG Annuities.
Diversification Opportunities for American National and FG Annuities
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and FG Annuities is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding American National Group and FG Annuities Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Annuities Life and American National 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 American National Group are associated (or correlated) with FG Annuities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Annuities Life has no effect on the direction of American National i.e., American National and FG Annuities go up and down completely randomly.
Pair Corralation between American National and FG Annuities
Assuming the 90 days trading horizon American National is expected to generate 4.46 times less return on investment than FG Annuities. But when comparing it to its historical volatility, American National Group is 2.24 times less risky than FG Annuities. It trades about 0.04 of its potential returns per unit of risk. FG Annuities Life is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,879 in FG Annuities Life on September 3, 2024 and sell it today you would earn a total of 2,954 from holding FG Annuities Life or generate 157.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American National Group vs. FG Annuities Life
Performance |
| Timeline |
| American National |
| FG Annuities Life |
American National and FG Annuities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American National and FG Annuities
The main advantage of trading using opposite American National and FG Annuities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American National position performs unexpectedly, FG Annuities 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 FG Annuities will offset losses from the drop in FG Annuities' long position.| American National vs. FG Annuities Life | American National vs. Globe Life | American National vs. MetLife Preferred Stock | American National vs. MetLife Preferred Stock |
| FG Annuities vs. Lincoln National | FG Annuities vs. Aflac Incorporated | FG Annuities vs. Unum Group | FG Annuities vs. Manulife Financial Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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