Correlation Between Brighthouse Financial and Unum
Can any of the company-specific risk be diversified away by investing in both Brighthouse Financial and Unum 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 Brighthouse Financial and Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brighthouse Financial and Unum Group, you can compare the effects of market volatilities on Brighthouse Financial and Unum 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 Brighthouse Financial with a short position of Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brighthouse Financial and Unum.
Diversification Opportunities for Brighthouse Financial and Unum
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Brighthouse and Unum is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Brighthouse Financial and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group and Brighthouse Financial 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 Brighthouse Financial are associated (or correlated) with Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Brighthouse Financial i.e., Brighthouse Financial and Unum go up and down completely randomly.
Pair Corralation between Brighthouse Financial and Unum
Considering the 90-day investment horizon Brighthouse Financial is expected to generate 6.46 times less return on investment than Unum. In addition to that, Brighthouse Financial is 1.31 times more volatile than Unum Group. It trades about 0.01 of its total potential returns per unit of risk. Unum Group is currently generating about 0.09 per unit of volatility. If you would invest 3,864 in Unum Group on August 28, 2024 and sell it today you would earn a total of 3,757 from holding Unum Group or generate 97.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brighthouse Financial vs. Unum Group
Performance |
| Timeline |
| Brighthouse Financial |
| Unum Group |
Brighthouse Financial and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brighthouse Financial and Unum
The main advantage of trading using opposite Brighthouse Financial and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighthouse Financial position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum's long position.| Brighthouse Financial vs. Prudential Financial | Brighthouse Financial vs. Lincoln National | Brighthouse Financial vs. Aflac Incorporated | Brighthouse Financial vs. Unum Group |
| Unum vs. Morningstar Unconstrained Allocation | Unum vs. Via Renewables | Unum vs. Sitka Gold Corp | Unum vs. MSCI ACWI exAUCONSUMER |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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