Correlation Between Horace Mann and First Acceptance
Can any of the company-specific risk be diversified away by investing in both Horace Mann and First Acceptance 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 Horace Mann and First Acceptance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horace Mann Educators and First Acceptance Corp, you can compare the effects of market volatilities on Horace Mann and First Acceptance 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 Horace Mann with a short position of First Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horace Mann and First Acceptance.
Diversification Opportunities for Horace Mann and First Acceptance
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Horace and First is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Horace Mann Educators and First Acceptance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Acceptance Corp and Horace Mann 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 Horace Mann Educators are associated (or correlated) with First Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Acceptance Corp has no effect on the direction of Horace Mann i.e., Horace Mann and First Acceptance go up and down completely randomly.
Pair Corralation between Horace Mann and First Acceptance
Considering the 90-day investment horizon Horace Mann Educators is expected to generate 0.26 times more return on investment than First Acceptance. However, Horace Mann Educators is 3.91 times less risky than First Acceptance. It trades about 0.03 of its potential returns per unit of risk. First Acceptance Corp is currently generating about -0.02 per unit of risk. If you would invest 3,423 in Horace Mann Educators on August 27, 2024 and sell it today you would earn a total of 720.00 from holding Horace Mann Educators or generate 21.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.07% |
| Values | Daily Returns |
Horace Mann Educators vs. First Acceptance Corp
Performance |
| Timeline |
| Horace Mann Educators |
| First Acceptance Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Horace Mann and First Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horace Mann and First Acceptance
The main advantage of trading using opposite Horace Mann and First Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horace Mann position performs unexpectedly, First Acceptance 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 First Acceptance will offset losses from the drop in First Acceptance's long position.| Horace Mann vs. Kemper | Horace Mann vs. RLI Corp | Horace Mann vs. Global Indemnity PLC | Horace Mann vs. Argo Group International |
| First Acceptance vs. Essent Group | First Acceptance vs. James River Group | First Acceptance vs. MGIC Investment Corp | First Acceptance vs. Employers Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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