Correlation Between National Western and Primerica
Can any of the company-specific risk be diversified away by investing in both National Western and Primerica 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 National Western and Primerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Western Life and Primerica, you can compare the effects of market volatilities on National Western and Primerica 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 National Western with a short position of Primerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Western and Primerica.
Diversification Opportunities for National Western and Primerica
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Primerica is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding National Western Life and Primerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primerica and National Western 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 National Western Life are associated (or correlated) with Primerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primerica has no effect on the direction of National Western i.e., National Western and Primerica go up and down completely randomly.
Pair Corralation between National Western and Primerica
If you would invest 27,360 in Primerica on September 2, 2024 and sell it today you would earn a total of 2,915 from holding Primerica or generate 10.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
National Western Life vs. Primerica
Performance |
| Timeline |
| National Western Life |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Primerica |
National Western and Primerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Western and Primerica
The main advantage of trading using opposite National Western and Primerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Western position performs unexpectedly, Primerica 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 Primerica will offset losses from the drop in Primerica's long position.| National Western vs. MetLife Preferred Stock | National Western vs. Prudential Public Limited | National Western vs. CNO Financial Group | National Western vs. FG Annuities Life |
| Primerica vs. CNO Financial Group | Primerica vs. Aflac Incorporated | Primerica vs. Prudential Public Limited | Primerica vs. FG Annuities Life |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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