Correlation Between CNO Financial and UTG

Can any of the company-specific risk be diversified away by investing in both CNO Financial and UTG 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 CNO Financial and UTG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CNO Financial Group and UTG Inc, you can compare the effects of market volatilities on CNO Financial and UTG 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 CNO Financial with a short position of UTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNO Financial and UTG.

Diversification Opportunities for CNO Financial and UTG

0.74

Correlation Coefficient

CNO Financial  UTG

Poor diversification

The 3 months correlation between CNO and UTG is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CNO Financial Group and UTG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTG Inc and CNO Financial 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 CNO Financial Group are associated (or correlated) with UTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTG Inc has no effect on the direction of CNO Financial i.e., CNO Financial and UTG go up and down completely randomly.

Pair Corralation between CNO Financial and UTG

If you would invest  3,498  in CNO Financial Group on September 23, 2024 and sell it today you would earn a total of  180.00  from holding CNO Financial Group or generate 5.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.54%
Values	Daily Returns

CNO Financial Group  vs.  UTG Inc

CNO Financial Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CNO Financial Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CNO Financial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

UTG Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UTG Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, UTG is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CNO Financial and UTG

The main advantage of trading using opposite CNO Financial and UTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNO Financial position performs unexpectedly, UTG 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 UTG will offset losses from the drop in UTG's long position.

The idea behind CNO Financial Group and UTG Inc 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.