Correlation Between Reinsurance Group and Unum
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group 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 Reinsurance Group and Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and Unum Group, you can compare the effects of market volatilities on Reinsurance Group 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 Reinsurance Group with a short position of Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Unum.
Diversification Opportunities for Reinsurance Group and Unum
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Reinsurance and Unum is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group and Reinsurance Group 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 Reinsurance Group of 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 Reinsurance Group i.e., Reinsurance Group and Unum go up and down completely randomly.
Pair Corralation between Reinsurance Group and Unum
Considering the 90-day investment horizon Reinsurance Group of is expected to under-perform the Unum. But the stock apears to be less risky and, when comparing its historical volatility, Reinsurance Group of is 2.47 times less risky than Unum. The stock trades about -0.02 of its potential returns per unit of risk. The Unum Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,504 in Unum Group on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Unum Group or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. Unum Group
Performance |
| Timeline |
| Reinsurance Group |
| Unum Group |
Reinsurance Group and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Unum
The main advantage of trading using opposite Reinsurance Group and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group 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.| Reinsurance Group vs. Southern Co | Reinsurance Group vs. Stifel Financial | Reinsurance Group vs. Entergy New Orleans | Reinsurance Group vs. Entergy Arkansas LLC |
| Unum vs. Aspen Insurance Holdings | Unum vs. Siriuspoint | Unum vs. United Fire Group | Unum vs. Sun Life Financial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |