Correlation Between Old Republic and Unum
Can any of the company-specific risk be diversified away by investing in both Old Republic 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 Old Republic and Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and Unum Group, you can compare the effects of market volatilities on Old Republic 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 Old Republic with a short position of Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Unum.
Diversification Opportunities for Old Republic and Unum
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and Unum is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group and Old Republic 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 Old Republic International 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 Old Republic i.e., Old Republic and Unum go up and down completely randomly.
Pair Corralation between Old Republic and Unum
Considering the 90-day investment horizon Old Republic International is expected to generate 1.37 times more return on investment than Unum. However, Old Republic is 1.37 times more volatile than Unum Group. It trades about 0.0 of its potential returns per unit of risk. Unum Group is currently generating about -0.03 per unit of risk. If you would invest 3,620 in Old Republic International on October 23, 2024 and sell it today you would lose (16.00) from holding Old Republic International or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. Unum Group
Performance |
| Timeline |
| Old Republic Interna |
| Unum Group |
Old Republic and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and Unum
The main advantage of trading using opposite Old Republic and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic 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.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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