Correlation Between Globe Life and Primerica
Can any of the company-specific risk be diversified away by investing in both Globe Life and Primerica 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 Globe Life and Primerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Life and Primerica, you can compare the effects of market volatilities on Globe Life and Primerica 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 Globe Life with a short position of Primerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Life and Primerica.
Diversification Opportunities for Globe Life and Primerica
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globe and Primerica is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Globe Life and Primerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primerica and Globe Life 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 Globe Life are associated (or correlated) with Primerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primerica has no effect on the direction of Globe Life i.e., Globe Life and Primerica go up and down completely randomly.
Pair Corralation between Globe Life and Primerica
Allowing for the 90-day total investment horizon Globe Life is expected to generate 3.56 times less return on investment than Primerica. In addition to that, Globe Life is 2.09 times more volatile than Primerica. It trades about 0.01 of its total potential returns per unit of risk. Primerica is currently generating about 0.11 per unit of volatility. If you would invest 14,334 in Primerica on August 23, 2024 and sell it today you would earn a total of 15,362 from holding Primerica or generate 107.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Life vs. Primerica
Performance |
| Timeline |
| Globe Life |
| Primerica |
Globe Life and Primerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Life and Primerica
The main advantage of trading using opposite Globe Life and Primerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Life position performs unexpectedly, Primerica 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 Primerica will offset losses from the drop in Primerica's long position.| Globe Life vs. Prudential Public Limited | Globe Life vs. CNO Financial Group | Globe Life vs. MetLife Preferred Stock | Globe Life vs. MetLife |
| Primerica vs. CNO Financial Group | Primerica vs. Aflac Incorporated | Primerica vs. Prudential Public Limited | Primerica vs. FG Annuities Life |
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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