Correlation Between CNO Financial and Midwest Holding
Can any of the company-specific risk be diversified away by investing in both CNO Financial and Midwest Holding 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 Midwest Holding 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 Midwest Holding, you can compare the effects of market volatilities on CNO Financial and Midwest Holding 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 Midwest Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNO Financial and Midwest Holding.
Diversification Opportunities for CNO Financial and Midwest Holding
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CNO and Midwest is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CNO Financial Group and Midwest Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midwest Holding 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 Midwest Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midwest Holding has no effect on the direction of CNO Financial i.e., CNO Financial and Midwest Holding go up and down completely randomly.
Pair Corralation between CNO Financial and Midwest Holding
If you would invest 3,475 in CNO Financial Group on August 28, 2024 and sell it today you would earn a total of 558.00 from holding CNO Financial Group or generate 16.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
CNO Financial Group vs. Midwest Holding
Performance |
| Timeline |
| CNO Financial Group |
| Midwest Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CNO Financial and Midwest Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNO Financial and Midwest Holding
The main advantage of trading using opposite CNO Financial and Midwest Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNO Financial position performs unexpectedly, Midwest Holding 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 Midwest Holding will offset losses from the drop in Midwest Holding's long position.| CNO Financial vs. MetLife Preferred Stock | CNO Financial vs. FG Annuities Life | CNO Financial vs. Prudential Public Limited | CNO Financial vs. MetLife Preferred Stock |
| Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. FG Annuities Life | Midwest Holding vs. CNO Financial 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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