Correlation Between Kansas City and CNO Financial
Can any of the company-specific risk be diversified away by investing in both Kansas City 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 Kansas City and CNO Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kansas City Life and CNO Financial Group, you can compare the effects of market volatilities on Kansas City 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 Kansas City with a short position of CNO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kansas City and CNO Financial.
Diversification Opportunities for Kansas City and CNO Financial
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kansas and CNO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kansas City Life 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 Kansas City 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 Kansas City Life 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 Kansas City i.e., Kansas City and CNO Financial go up and down completely randomly.
Pair Corralation between Kansas City and CNO Financial
Given the investment horizon of 90 days Kansas City Life is expected to under-perform the CNO Financial. But the otc stock apears to be less risky and, when comparing its historical volatility, Kansas City Life is 1.13 times less risky than CNO Financial. The otc stock trades about -0.13 of its potential returns per unit of risk. The CNO Financial Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,165 in CNO Financial Group on August 27, 2024 and sell it today you would earn a total of 1,826 from holding CNO Financial Group or generate 84.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.07% |
| Values | Daily Returns |
Kansas City Life vs. CNO Financial Group
Performance |
| Timeline |
| Kansas City Life |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CNO Financial Group |
Kansas City and CNO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kansas City and CNO Financial
The main advantage of trading using opposite Kansas City and CNO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kansas City 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.| Kansas City vs. CNO Financial Group | Kansas City vs. FG Annuities Life | Kansas City vs. Prudential Public Limited | Kansas City vs. Lincoln National |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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