Correlation Between FG Annuities and Lincoln National
Can any of the company-specific risk be diversified away by investing in both FG Annuities and Lincoln National 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 Lincoln National 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 Lincoln National, you can compare the effects of market volatilities on FG Annuities and Lincoln National 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 Lincoln National. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Annuities and Lincoln National.
Diversification Opportunities for FG Annuities and Lincoln National
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FG Annuities and Lincoln is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding FG Annuities Life and Lincoln National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln National 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 Lincoln National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln National has no effect on the direction of FG Annuities i.e., FG Annuities and Lincoln National go up and down completely randomly.
Pair Corralation between FG Annuities and Lincoln National
Allowing for the 90-day total investment horizon FG Annuities Life is expected to generate 1.11 times more return on investment than Lincoln National. However, FG Annuities is 1.11 times more volatile than Lincoln National. It trades about 0.08 of its potential returns per unit of risk. Lincoln National is currently generating about 0.02 per unit of risk. If you would invest 1,817 in FG Annuities Life on August 28, 2024 and sell it today you would earn a total of 3,026 from holding FG Annuities Life or generate 166.54% 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. Lincoln National
Performance |
| Timeline |
| FG Annuities Life |
| Lincoln National |
FG Annuities and Lincoln National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FG Annuities and Lincoln National
The main advantage of trading using opposite FG Annuities and Lincoln National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Annuities position performs unexpectedly, Lincoln National 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 Lincoln National will offset losses from the drop in Lincoln National's long position.| FG Annuities vs. Morningstar Unconstrained Allocation | FG Annuities vs. Via Renewables | FG Annuities vs. Sitka Gold Corp | FG Annuities vs. MSCI ACWI exAUCONSUMER |
| Lincoln National vs. Morningstar Unconstrained Allocation | Lincoln National vs. Via Renewables | Lincoln National vs. Sitka Gold Corp | Lincoln National 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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