Correlation Between Unum and Aviva PLC
Can any of the company-specific risk be diversified away by investing in both Unum and Aviva PLC 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 Aviva PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unum Group and Aviva PLC ADR, you can compare the effects of market volatilities on Unum and Aviva PLC 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 Aviva PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unum and Aviva PLC.
Diversification Opportunities for Unum and Aviva PLC
Excellent diversification
The 3 months correlation between Unum and Aviva is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Unum Group and Aviva PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviva PLC ADR 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 Aviva PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aviva PLC ADR has no effect on the direction of Unum i.e., Unum and Aviva PLC go up and down completely randomly.
Pair Corralation between Unum and Aviva PLC
If you would invest 6,163 in Unum Group on August 30, 2024 and sell it today you would earn a total of 1,544 from holding Unum Group or generate 25.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Unum Group vs. Aviva PLC ADR
Performance |
| Timeline |
| Unum Group |
| Aviva PLC ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Unum and Aviva PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unum and Aviva PLC
The main advantage of trading using opposite Unum and Aviva PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unum position performs unexpectedly, Aviva PLC 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 Aviva PLC will offset losses from the drop in Aviva PLC's long position.| Unum vs. Prudential Financial | Unum vs. MetLife | Unum vs. Jackson Financial | Unum vs. Manulife Financial Corp |
| Aviva PLC vs. AXA SA | Aviva PLC vs. Assicurazioni Generali SpA | Aviva PLC vs. Athene Holding | Aviva PLC vs. ageas SANV |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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