Correlation Between Unum and Entergy Arkansas
Can any of the company-specific risk be diversified away by investing in both Unum and Entergy Arkansas 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 Entergy Arkansas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unum Group and Entergy Arkansas LLC, you can compare the effects of market volatilities on Unum and Entergy Arkansas 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 Entergy Arkansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unum and Entergy Arkansas.
Diversification Opportunities for Unum and Entergy Arkansas
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Unum and Entergy is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Unum Group and Entergy Arkansas LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy Arkansas LLC 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 Entergy Arkansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy Arkansas LLC has no effect on the direction of Unum i.e., Unum and Entergy Arkansas go up and down completely randomly.
Pair Corralation between Unum and Entergy Arkansas
Given the investment horizon of 90 days Unum is expected to generate 1.06 times less return on investment than Entergy Arkansas. But when comparing it to its historical volatility, Unum Group is 1.02 times less risky than Entergy Arkansas. It trades about 0.03 of its potential returns per unit of risk. Entergy Arkansas LLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,946 in Entergy Arkansas LLC on August 31, 2024 and sell it today you would earn a total of 258.00 from holding Entergy Arkansas LLC or generate 13.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Unum Group vs. Entergy Arkansas LLC
Performance |
| Timeline |
| Unum Group |
| Entergy Arkansas LLC |
Unum and Entergy Arkansas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unum and Entergy Arkansas
The main advantage of trading using opposite Unum and Entergy Arkansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unum position performs unexpectedly, Entergy Arkansas 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 Entergy Arkansas will offset losses from the drop in Entergy Arkansas' long position.| Unum vs. AKITA Drilling | Unum vs. Nabors Industries | Unum vs. Getty Images Holdings | Unum vs. Precision Drilling |
| Entergy Arkansas vs. Entergy Mississippi LLC | Entergy Arkansas vs. Entergy New Orleans | Entergy Arkansas vs. Entergy Louisiana LLC | Entergy Arkansas vs. Southern Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |