Correlation Between FG Annuities and Aflac Incorporated
Can any of the company-specific risk be diversified away by investing in both FG Annuities and Aflac Incorporated 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 FG Annuities and Aflac Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Annuities Life and Aflac Incorporated, you can compare the effects of market volatilities on FG Annuities and Aflac Incorporated 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 FG Annuities with a short position of Aflac Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Annuities and Aflac Incorporated.
Diversification Opportunities for FG Annuities and Aflac Incorporated
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FG Annuities and Aflac is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding FG Annuities Life and Aflac Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aflac Incorporated and FG Annuities 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 FG Annuities Life are associated (or correlated) with Aflac Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aflac Incorporated has no effect on the direction of FG Annuities i.e., FG Annuities and Aflac Incorporated go up and down completely randomly.
Pair Corralation between FG Annuities and Aflac Incorporated
Allowing for the 90-day total investment horizon FG Annuities Life is expected to generate 1.86 times more return on investment than Aflac Incorporated. However, FG Annuities is 1.86 times more volatile than Aflac Incorporated. It trades about 0.24 of its potential returns per unit of risk. Aflac Incorporated is currently generating about 0.19 per unit of risk. If you would invest 4,113 in FG Annuities Life on November 3, 2024 and sell it today you would earn a total of 478.00 from holding FG Annuities Life or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FG Annuities Life vs. Aflac Incorporated
Performance |
| Timeline |
| FG Annuities Life |
| Aflac Incorporated |
FG Annuities and Aflac Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FG Annuities and Aflac Incorporated
The main advantage of trading using opposite FG Annuities and Aflac Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Annuities position performs unexpectedly, Aflac Incorporated 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 Aflac Incorporated will offset losses from the drop in Aflac Incorporated's long position.| FG Annuities vs. Prudential Financial | FG Annuities vs. Lincoln National | FG Annuities vs. Aflac Incorporated | FG Annuities vs. Unum Group |
| Aflac Incorporated vs. Prudential Financial | Aflac Incorporated vs. Lincoln National | Aflac Incorporated vs. Brighthouse Financial | Aflac Incorporated 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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