Correlation Between Genworth Financial and CNO Financial
Can any of the company-specific risk be diversified away by investing in both Genworth Financial and CNO Financial 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 Genworth Financial and CNO Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genworth Financial and CNO Financial Group, you can compare the effects of market volatilities on Genworth Financial and CNO Financial 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 Genworth Financial with a short position of CNO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genworth Financial and CNO Financial.
Diversification Opportunities for Genworth Financial and CNO Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Genworth and CNO is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Genworth Financial and CNO Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNO Financial Group and Genworth 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 Genworth Financial are associated (or correlated) with CNO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNO Financial Group has no effect on the direction of Genworth Financial i.e., Genworth Financial and CNO Financial go up and down completely randomly.
Pair Corralation between Genworth Financial and CNO Financial
Considering the 90-day investment horizon Genworth Financial is expected to generate 1.12 times less return on investment than CNO Financial. But when comparing it to its historical volatility, Genworth Financial is 1.23 times less risky than CNO Financial. It trades about 0.28 of its potential returns per unit of risk. CNO Financial Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,468 in CNO Financial Group on August 30, 2024 and sell it today you would earn a total of 548.00 from holding CNO Financial Group or generate 15.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genworth Financial vs. CNO Financial Group
Performance |
| Timeline |
| Genworth Financial |
| CNO Financial Group |
Genworth Financial and CNO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genworth Financial and CNO Financial
The main advantage of trading using opposite Genworth Financial and CNO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genworth Financial position performs unexpectedly, CNO Financial 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 CNO Financial will offset losses from the drop in CNO Financial's long position.| Genworth Financial vs. MetLife Preferred Stock | Genworth Financial vs. Prudential Public Limited | Genworth Financial vs. Primerica | Genworth Financial vs. CNO Financial Group |
| CNO Financial vs. MetLife Preferred Stock | CNO Financial vs. FG Annuities Life | CNO Financial vs. Prudential Public Limited | CNO Financial vs. MetLife Preferred Stock |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |