Correlation Between Brighthouse Financial and CNO Financial
Can any of the company-specific risk be diversified away by investing in both Brighthouse Financial 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 Brighthouse Financial and CNO Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brighthouse Financial and CNO Financial Group, you can compare the effects of market volatilities on Brighthouse Financial 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 Brighthouse Financial with a short position of CNO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brighthouse Financial and CNO Financial.
Diversification Opportunities for Brighthouse Financial and CNO Financial
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brighthouse and CNO is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Brighthouse Financial 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 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 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 Brighthouse Financial i.e., Brighthouse Financial and CNO Financial go up and down completely randomly.
Pair Corralation between Brighthouse Financial and CNO Financial
Assuming the 90 days horizon Brighthouse Financial is expected to under-perform the CNO Financial. In addition to that, Brighthouse Financial is 1.18 times more volatile than CNO Financial Group. It trades about -0.14 of its total potential returns per unit of risk. CNO Financial Group is currently generating about 0.14 per unit of volatility. If you would invest 1,926 in CNO Financial Group on November 18, 2024 and sell it today you would earn a total of 77.00 from holding CNO Financial Group or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Brighthouse Financial vs. CNO Financial Group
Performance |
| Timeline |
| Brighthouse Financial |
| CNO Financial Group |
Brighthouse Financial and CNO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brighthouse Financial and CNO Financial
The main advantage of trading using opposite Brighthouse Financial and CNO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighthouse Financial 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.| Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. First Citizens BancShares |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |