Correlation Between MSCI ACWI and Aflac Incorporated
Can any of the company-specific risk be diversified away by investing in both MSCI ACWI and Aflac Incorporated 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 MSCI ACWI and Aflac Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSCI ACWI exAUCONSUMER and Aflac Incorporated, you can compare the effects of market volatilities on MSCI ACWI and Aflac Incorporated 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 MSCI ACWI with a short position of Aflac Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSCI ACWI and Aflac Incorporated.
Diversification Opportunities for MSCI ACWI and Aflac Incorporated
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MSCI and Aflac is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MSCI ACWI exAUCONSUMER and Aflac Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aflac Incorporated and MSCI ACWI 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 MSCI ACWI exAUCONSUMER are associated (or correlated) with Aflac Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aflac Incorporated has no effect on the direction of MSCI ACWI i.e., MSCI ACWI and Aflac Incorporated go up and down completely randomly.
Pair Corralation between MSCI ACWI and Aflac Incorporated
Assuming the 90 days horizon MSCI ACWI is expected to generate 4.0 times less return on investment than Aflac Incorporated. But when comparing it to its historical volatility, MSCI ACWI exAUCONSUMER is 5.64 times less risky than Aflac Incorporated. It trades about 0.17 of its potential returns per unit of risk. Aflac Incorporated is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 10,930 in Aflac Incorporated on August 28, 2024 and sell it today you would earn a total of 390.00 from holding Aflac Incorporated or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSCI ACWI exAUCONSUMER vs. Aflac Incorporated
Performance |
| Timeline |
| MSCI ACWI exAUCONSUMER |
| Aflac Incorporated |
MSCI ACWI and Aflac Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSCI ACWI and Aflac Incorporated
The main advantage of trading using opposite MSCI ACWI and Aflac Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSCI ACWI position performs unexpectedly, Aflac Incorporated 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 Aflac Incorporated will offset losses from the drop in Aflac Incorporated's long position.| MSCI ACWI vs. Harrow Health 8625 | MSCI ACWI vs. Babcock Wilcox Enterprises, | MSCI ACWI vs. Babcock Wilcox Enterprises | MSCI ACWI vs. TRINL |
| Aflac Incorporated vs. Morningstar Unconstrained Allocation | Aflac Incorporated vs. Via Renewables | Aflac Incorporated vs. Sitka Gold Corp | Aflac Incorporated vs. MSCI ACWI exAUCONSUMER |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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