Correlation Between CNO Financial and Genworth Financial
Can any of the company-specific risk be diversified away by investing in both CNO Financial and Genworth 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 CNO Financial and Genworth Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNO Financial Group and Genworth Financial, you can compare the effects of market volatilities on CNO Financial and Genworth 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 CNO Financial with a short position of Genworth Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNO Financial and Genworth Financial.
Diversification Opportunities for CNO Financial and Genworth Financial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CNO and Genworth is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CNO Financial Group and Genworth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genworth Financial and CNO 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 CNO Financial Group are associated (or correlated) with Genworth Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genworth Financial has no effect on the direction of CNO Financial i.e., CNO Financial and Genworth Financial go up and down completely randomly.
Pair Corralation between CNO Financial and Genworth Financial
Assuming the 90 days trading horizon CNO Financial is expected to generate 1.01 times less return on investment than Genworth Financial. In addition to that, CNO Financial is 1.09 times more volatile than Genworth Financial. It trades about 0.08 of its total potential returns per unit of risk. Genworth Financial is currently generating about 0.09 per unit of volatility. If you would invest 615.00 in Genworth Financial on August 27, 2024 and sell it today you would earn a total of 162.00 from holding Genworth Financial or generate 26.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNO Financial Group vs. Genworth Financial
Performance |
| Timeline |
| CNO Financial Group |
| Genworth Financial |
CNO Financial and Genworth Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNO Financial and Genworth Financial
The main advantage of trading using opposite CNO Financial and Genworth Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNO Financial position performs unexpectedly, Genworth 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 Genworth Financial will offset losses from the drop in Genworth Financial's long position.| CNO Financial vs. Assurant | CNO Financial vs. Affiliated Managers Group, | CNO Financial vs. The Carlyle Group | CNO Financial vs. Affiliated Managers Group, |
| Genworth Financial vs. Morningstar Unconstrained Allocation | Genworth Financial vs. Via Renewables | Genworth Financial vs. Sitka Gold Corp | Genworth Financial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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