Correlation Between Unum and American Equity
Can any of the company-specific risk be diversified away by investing in both Unum and American Equity 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 Unum and American Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unum Group and American Equity Investment, you can compare the effects of market volatilities on Unum and American Equity 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 Unum with a short position of American Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unum and American Equity.
Diversification Opportunities for Unum and American Equity
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Unum and American is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Unum Group and American Equity Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Equity Inve and Unum 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 Unum Group are associated (or correlated) with American Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Equity Inve has no effect on the direction of Unum i.e., Unum and American Equity go up and down completely randomly.
Pair Corralation between Unum and American Equity
If you would invest 6,185 in Unum Group on August 28, 2024 and sell it today you would earn a total of 1,436 from holding Unum Group or generate 23.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Unum Group vs. American Equity Investment
Performance |
| Timeline |
| Unum Group |
| American Equity Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Unum and American Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unum and American Equity
The main advantage of trading using opposite Unum and American Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unum position performs unexpectedly, American Equity 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 American Equity will offset losses from the drop in American Equity's long position.| Unum vs. Morningstar Unconstrained Allocation | Unum vs. Via Renewables | Unum vs. Sitka Gold Corp | Unum vs. MSCI ACWI exAUCONSUMER |
| American Equity vs. MetLife Preferred Stock | American Equity vs. Prudential Public Limited | American Equity vs. MetLife Preferred Stock | American Equity vs. Jackson 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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