Correlation Between UTG and American National
Can any of the company-specific risk be diversified away by investing in both UTG 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 UTG and American National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UTG Inc and American National Group, you can compare the effects of market volatilities on UTG 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 UTG with a short position of American National. Check out your portfolio center. Please also check ongoing floating volatility patterns of UTG and American National.
Diversification Opportunities for UTG and American National
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UTG and American is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding UTG Inc and American National Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National and UTG 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 UTG Inc 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 UTG i.e., UTG and American National go up and down completely randomly.
Pair Corralation between UTG and American National
Given the investment horizon of 90 days UTG Inc is expected to generate 9.19 times more return on investment than American National. However, UTG is 9.19 times more volatile than American National Group. It trades about 0.05 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 2,850 in UTG Inc on August 31, 2024 and sell it today you would earn a total of 110.00 from holding UTG Inc or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 8.31% |
| Values | Daily Returns |
UTG Inc vs. American National Group
Performance |
| Timeline |
| UTG Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American National |
UTG and American National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UTG and American National
The main advantage of trading using opposite UTG and American National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UTG 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.The idea behind UTG Inc and American National Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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