Correlation Between CNO Financial and Life Insurance
Can any of the company-specific risk be diversified away by investing in both CNO Financial and Life Insurance 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 Life Insurance 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 Life Insurance, you can compare the effects of market volatilities on CNO Financial and Life Insurance 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 Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNO Financial and Life Insurance.
Diversification Opportunities for CNO Financial and Life Insurance
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CNO and Life is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CNO Financial Group and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance 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 Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of CNO Financial i.e., CNO Financial and Life Insurance go up and down completely randomly.
Pair Corralation between CNO Financial and Life Insurance
Considering the 90-day investment horizon CNO Financial Group is expected to generate 1.21 times more return on investment than Life Insurance. However, CNO Financial is 1.21 times more volatile than Life Insurance. It trades about 0.12 of its potential returns per unit of risk. Life Insurance is currently generating about -0.05 per unit of risk. If you would invest 3,475 in CNO Financial Group on August 30, 2024 and sell it today you would earn a total of 541.00 from holding CNO Financial Group or generate 15.57% 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. Life Insurance
Performance |
| Timeline |
| CNO Financial Group |
| Life Insurance |
CNO Financial and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNO Financial and Life Insurance
The main advantage of trading using opposite CNO Financial and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNO Financial position performs unexpectedly, Life Insurance 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 Life Insurance will offset losses from the drop in Life Insurance's long position.| CNO Financial vs. Aflac Incorporated | CNO Financial vs. Unum Group | CNO Financial vs. Brighthouse Financial |
| Life Insurance vs. Axalta Coating Systems | Life Insurance vs. Eastman Chemical | Life Insurance vs. Warner Music Group | Life Insurance vs. Helmerich and Payne |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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