Correlation Between Affiliated Managers and CNO Financial
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers 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 Affiliated Managers and CNO Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group, and CNO Financial Group, you can compare the effects of market volatilities on Affiliated Managers 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 Affiliated Managers with a short position of CNO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and CNO Financial.
Diversification Opportunities for Affiliated Managers and CNO Financial
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Affiliated and CNO is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group, 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 Affiliated Managers 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 Affiliated Managers Group, 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 Affiliated Managers i.e., Affiliated Managers and CNO Financial go up and down completely randomly.
Pair Corralation between Affiliated Managers and CNO Financial
Given the investment horizon of 90 days Affiliated Managers Group, is expected to under-perform the CNO Financial. But the stock apears to be less risky and, when comparing its historical volatility, Affiliated Managers Group, is 1.68 times less risky than CNO Financial. The stock trades about -0.1 of its potential returns per unit of risk. The CNO Financial Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,121 in CNO Financial Group on August 30, 2024 and sell it today you would lose (44.00) from holding CNO Financial Group or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Affiliated Managers Group, vs. CNO Financial Group
Performance |
| Timeline |
| Affiliated Managers |
| CNO Financial Group |
Affiliated Managers and CNO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Managers and CNO Financial
The main advantage of trading using opposite Affiliated Managers and CNO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers 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.| Affiliated Managers vs. Affiliated Managers Group, | Affiliated Managers vs. Southern Company Series | Affiliated Managers vs. Affiliated Managers Group | Affiliated Managers vs. Southern Co |
| CNO Financial vs. Assurant | CNO Financial vs. Affiliated Managers Group, | CNO Financial vs. The Carlyle Group | CNO Financial vs. Affiliated Managers 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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