Correlation Between Lincoln National and Midwest Holding
Can any of the company-specific risk be diversified away by investing in both Lincoln National and Midwest Holding 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 Midwest Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lincoln National and Midwest Holding, you can compare the effects of market volatilities on Lincoln National and Midwest Holding 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 Midwest Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln National and Midwest Holding.
Diversification Opportunities for Lincoln National and Midwest Holding
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lincoln and Midwest is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln National and Midwest Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midwest Holding 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 Midwest Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midwest Holding has no effect on the direction of Lincoln National i.e., Lincoln National and Midwest Holding go up and down completely randomly.
Pair Corralation between Lincoln National and Midwest Holding
If you would invest 3,136 in Lincoln National on November 3, 2024 and sell it today you would earn a total of 390.87 from holding Lincoln National or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Lincoln National vs. Midwest Holding
Performance |
| Timeline |
| Lincoln National |
| Midwest Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lincoln National and Midwest Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln National and Midwest Holding
The main advantage of trading using opposite Lincoln National and Midwest Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln National position performs unexpectedly, Midwest Holding 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 Midwest Holding will offset losses from the drop in Midwest Holding's long position.| Lincoln National vs. MetLife | Lincoln National vs. Aflac Incorporated | Lincoln National vs. Unum Group | Lincoln National vs. Manulife Financial Corp |
| Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. FG Annuities Life | Midwest Holding vs. CNO Financial Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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