Correlation Between CNO Financial and MetLife
Can any of the company-specific risk be diversified away by investing in both CNO Financial and MetLife 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 MetLife 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 MetLife, you can compare the effects of market volatilities on CNO Financial and MetLife 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 MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNO Financial and MetLife.
Diversification Opportunities for CNO Financial and MetLife
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNO and MetLife is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CNO Financial Group and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife 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 MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of CNO Financial i.e., CNO Financial and MetLife go up and down completely randomly.
Pair Corralation between CNO Financial and MetLife
Considering the 90-day investment horizon CNO Financial Group is expected to generate 0.97 times more return on investment than MetLife. However, CNO Financial Group is 1.03 times less risky than MetLife. It trades about 0.29 of its potential returns per unit of risk. MetLife is currently generating about 0.22 per unit of risk. If you would invest 3,714 in CNO Financial Group on November 3, 2024 and sell it today you would earn a total of 280.00 from holding CNO Financial Group or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNO Financial Group vs. MetLife
Performance |
| Timeline |
| CNO Financial Group |
| MetLife |
CNO Financial and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNO Financial and MetLife
The main advantage of trading using opposite CNO Financial and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNO Financial position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.| CNO Financial vs. MetLife Preferred Stock | CNO Financial vs. FG Annuities Life | CNO Financial vs. Prudential PLC ADR | CNO Financial vs. MetLife Preferred Stock |
| MetLife vs. Prudential Financial | MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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