Correlation Between Unum and Midwest Holding
Can any of the company-specific risk be diversified away by investing in both Unum and Midwest Holding 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 Midwest Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unum Group and Midwest Holding, you can compare the effects of market volatilities on Unum and Midwest Holding 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 Midwest Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unum and Midwest Holding.
Diversification Opportunities for Unum and Midwest Holding
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Unum and Midwest is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Unum Group and Midwest Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midwest Holding 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 Midwest Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midwest Holding has no effect on the direction of Unum i.e., Unum and Midwest Holding go up and down completely randomly.
Pair Corralation between Unum and Midwest Holding
If you would invest 7,252 in Unum Group on November 3, 2024 and sell it today you would earn a total of 373.00 from holding Unum Group or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 5.0% |
| Values | Daily Returns |
Unum Group vs. Midwest Holding
Performance |
| Timeline |
| Unum Group |
| Midwest Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Unum and Midwest Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unum and Midwest Holding
The main advantage of trading using opposite Unum and Midwest Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unum position performs unexpectedly, Midwest Holding 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 Midwest Holding will offset losses from the drop in Midwest Holding's long position.| Unum vs. Prudential Financial | Unum vs. MetLife | Unum vs. Jackson Financial | Unum vs. Manulife Financial Corp |
| Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. FG Annuities Life | Midwest Holding vs. CNO Financial Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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