Correlation Between Lincoln National and Unum
Can any of the company-specific risk be diversified away by investing in both Lincoln National and Unum 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 Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lincoln National and Unum Group, you can compare the effects of market volatilities on Lincoln National and Unum 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 Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln National and Unum.
Diversification Opportunities for Lincoln National and Unum
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lincoln and Unum is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln National and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Lincoln National i.e., Lincoln National and Unum go up and down completely randomly.
Pair Corralation between Lincoln National and Unum
Considering the 90-day investment horizon Lincoln National is expected to generate 2.07 times more return on investment than Unum. However, Lincoln National is 2.07 times more volatile than Unum Group. It trades about 0.36 of its potential returns per unit of risk. Unum Group is currently generating about 0.31 per unit of risk. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln National vs. Unum Group
Performance |
| Timeline |
| Lincoln National |
| Unum Group |
Lincoln National and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln National and Unum
The main advantage of trading using opposite Lincoln National and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln National position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum's long position.| Lincoln National vs. MetLife | Lincoln National vs. Aflac Incorporated | Lincoln National vs. Unum Group | Lincoln National vs. Manulife Financial Corp |
| Unum vs. Prudential Financial | Unum vs. MetLife | Unum vs. Jackson Financial | Unum vs. Manulife Financial Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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