Correlation Between Unum and American National
Can any of the company-specific risk be diversified away by investing in both Unum and American National 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 National 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 National Group, you can compare the effects of market volatilities on Unum and American National 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 National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unum and American National.
Diversification Opportunities for Unum and American National
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Unum and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Unum Group and American National Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National 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 National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American National has no effect on the direction of Unum i.e., Unum and American National go up and down completely randomly.
Pair Corralation between Unum and American National
Considering the 90-day investment horizon Unum Group is expected to generate 1.8 times more return on investment than American National. However, Unum is 1.8 times more volatile than American National Group. It trades about 0.12 of its potential returns per unit of risk. American National Group is currently generating about 0.05 per unit of risk. If you would invest 4,352 in Unum Group on August 31, 2024 and sell it today you would earn a total of 3,338 from holding Unum Group or generate 76.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Unum Group vs. American National Group
Performance |
| Timeline |
| Unum Group |
| American National |
Unum and American National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unum and American National
The main advantage of trading using opposite Unum and American National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unum position performs unexpectedly, American National 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 National will offset losses from the drop in American National's long position.| Unum vs. Prudential Financial | Unum vs. MetLife | Unum vs. Jackson Financial | Unum vs. Manulife Financial Corp |
| American National vs. FG Annuities Life | American National vs. Globe Life | American National vs. MetLife Preferred Stock | American National 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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