Correlation Between Globe Life and Value Line
Can any of the company-specific risk be diversified away by investing in both Globe Life and Value Line 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 Value Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Life and Value Line, you can compare the effects of market volatilities on Globe Life and Value Line 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 Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Life and Value Line.
Diversification Opportunities for Globe Life and Value Line
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globe and Value is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Globe Life and Value Line in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line 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 Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line has no effect on the direction of Globe Life i.e., Globe Life and Value Line go up and down completely randomly.
Pair Corralation between Globe Life and Value Line
Allowing for the 90-day total investment horizon Globe Life is expected to generate 0.89 times more return on investment than Value Line. However, Globe Life is 1.12 times less risky than Value Line. It trades about 0.02 of its potential returns per unit of risk. Value Line is currently generating about 0.02 per unit of risk. If you would invest 11,454 in Globe Life on August 30, 2024 and sell it today you would lose (284.00) from holding Globe Life or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Life vs. Value Line
Performance |
| Timeline |
| Globe Life |
| Value Line |
Globe Life and Value Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Life and Value Line
The main advantage of trading using opposite Globe Life and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Life position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line'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 |
| Value Line vs. Dun Bradstreet Holdings | Value Line vs. FactSet Research Systems | Value Line vs. Moodys | Value Line vs. MSCI Inc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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