Correlation Between NYSE Composite and CNO Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and CNO Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and CNO Financial Group, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of CNO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and CNO Financial.
Diversification Opportunities for NYSE Composite and CNO Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and CNO is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and CNO Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and CNO Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.35 times less return on investment than CNO Financial. But when comparing it to its historical volatility, NYSE Composite is 4.2 times less risky than CNO Financial. It trades about 0.13 of its potential returns per unit of risk. CNO Financial Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,510 in CNO Financial Group on August 24, 2024 and sell it today you would earn a total of 428.00 from holding CNO Financial Group or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. CNO Financial Group
Performance |
| Timeline |
NYSE Composite and CNO Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
CNO Financial Group
Pair trading matchups for CNO Financial
Pair Trading with NYSE Composite and CNO Financial
The main advantage of trading using opposite NYSE Composite and CNO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| CNO Financial vs. MetLife Preferred Stock | CNO Financial vs. FG Annuities Life | CNO Financial vs. Prudential Public Limited | CNO Financial 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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