Correlation Between Lincoln National and Abacus Life
Can any of the company-specific risk be diversified away by investing in both Lincoln National and Abacus Life 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 Lincoln National and Abacus Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lincoln National and Abacus Life, you can compare the effects of market volatilities on Lincoln National and Abacus Life 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 Lincoln National with a short position of Abacus Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln National and Abacus Life.
Diversification Opportunities for Lincoln National and Abacus Life
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Abacus is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln National and Abacus Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abacus Life and Lincoln National 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 Lincoln National are associated (or correlated) with Abacus Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abacus Life has no effect on the direction of Lincoln National i.e., Lincoln National and Abacus Life go up and down completely randomly.
Pair Corralation between Lincoln National and Abacus Life
Considering the 90-day investment horizon Lincoln National is expected to generate 0.84 times more return on investment than Abacus Life. However, Lincoln National is 1.19 times less risky than Abacus Life. It trades about 0.09 of its potential returns per unit of risk. Abacus Life is currently generating about -0.06 per unit of risk. If you would invest 3,359 in Lincoln National on August 31, 2024 and sell it today you would earn a total of 186.00 from holding Lincoln National or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln National vs. Abacus Life
Performance |
| Timeline |
| Lincoln National |
| Abacus Life |
Lincoln National and Abacus Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln National and Abacus Life
The main advantage of trading using opposite Lincoln National and Abacus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln National position performs unexpectedly, Abacus Life 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 Abacus Life will offset losses from the drop in Abacus Life's long position.| Lincoln National vs. MetLife | Lincoln National vs. Aflac Incorporated | Lincoln National vs. Unum Group | Lincoln National vs. Manulife Financial Corp |
| Abacus Life vs. FG Annuities Life | Abacus Life vs. Globe Life | Abacus Life vs. MetLife Preferred Stock | Abacus Life 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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