Correlation Between Great West and Citizens
Can any of the company-specific risk be diversified away by investing in both Great West and Citizens 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 Great West and Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Lifeco and Citizens, you can compare the effects of market volatilities on Great West and Citizens 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 Great West with a short position of Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Citizens.
Diversification Opportunities for Great West and Citizens
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and Citizens is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifeco and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens and Great West 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 Great West Lifeco are associated (or correlated) with Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Great West i.e., Great West and Citizens go up and down completely randomly.
Pair Corralation between Great West and Citizens
If you would invest 3,031 in Great West Lifeco on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Great West Lifeco or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Great West Lifeco vs. Citizens
Performance |
| Timeline |
| Great West Lifeco |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Citizens |
Great West and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Citizens
The main advantage of trading using opposite Great West and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.| Great West vs. Manulife Financial | Great West vs. Manulife Financial | Great West vs. Prudential Public Limited | Great West vs. Manulife Financial Corp |
| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential Public Limited |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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