Correlation Between SANLAM and Aflac Incorporated
Can any of the company-specific risk be diversified away by investing in both SANLAM and Aflac Incorporated 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 SANLAM and Aflac Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANLAM LTD RC 01 and Aflac Incorporated, you can compare the effects of market volatilities on SANLAM and Aflac Incorporated 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 SANLAM with a short position of Aflac Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANLAM and Aflac Incorporated.
Diversification Opportunities for SANLAM and Aflac Incorporated
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between SANLAM and Aflac is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SANLAM LTD RC 01 and Aflac Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aflac Incorporated and SANLAM 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 SANLAM LTD RC 01 are associated (or correlated) with Aflac Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aflac Incorporated has no effect on the direction of SANLAM i.e., SANLAM and Aflac Incorporated go up and down completely randomly.
Pair Corralation between SANLAM and Aflac Incorporated
Assuming the 90 days trading horizon SANLAM LTD RC 01 is expected to under-perform the Aflac Incorporated. In addition to that, SANLAM is 1.93 times more volatile than Aflac Incorporated. It trades about -0.08 of its total potential returns per unit of risk. Aflac Incorporated is currently generating about 0.13 per unit of volatility. If you would invest 9,950 in Aflac Incorporated on October 25, 2024 and sell it today you would earn a total of 235.00 from holding Aflac Incorporated or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
SANLAM LTD RC 01 vs. Aflac Incorporated
Performance |
| Timeline |
| SANLAM LTD RC |
| Aflac Incorporated |
SANLAM and Aflac Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANLAM and Aflac Incorporated
The main advantage of trading using opposite SANLAM and Aflac Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANLAM position performs unexpectedly, Aflac Incorporated 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 Aflac Incorporated will offset losses from the drop in Aflac Incorporated's long position.| SANLAM vs. REINET INVESTMENTS SCA | SANLAM vs. MidCap Financial Investment | SANLAM vs. Maple Leaf Foods | SANLAM vs. PennantPark Investment |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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