Correlation Between Lincoln National and Kansas City
Can any of the company-specific risk be diversified away by investing in both Lincoln National and Kansas City 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 Lincoln National and Kansas City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lincoln National and Kansas City Life, you can compare the effects of market volatilities on Lincoln National and Kansas City 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 Lincoln National with a short position of Kansas City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln National and Kansas City.
Diversification Opportunities for Lincoln National and Kansas City
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lincoln and Kansas is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln National and Kansas City Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansas City Life and Lincoln National 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 Lincoln National are associated (or correlated) with Kansas City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansas City Life has no effect on the direction of Lincoln National i.e., Lincoln National and Kansas City go up and down completely randomly.
Pair Corralation between Lincoln National and Kansas City
If you would invest 3,085 in Lincoln National on September 24, 2024 and sell it today you would earn a total of 40.00 from holding Lincoln National or generate 1.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 1.54% |
Values | Daily Returns |
Lincoln National vs. Kansas City Life
Performance |
Timeline |
Lincoln National |
Kansas City Life |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lincoln National and Kansas City Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lincoln National and Kansas City
The main advantage of trading using opposite Lincoln National and Kansas City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln National position performs unexpectedly, Kansas City 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 Kansas City will offset losses from the drop in Kansas City's long position.Lincoln National vs. Unum Group | Lincoln National vs. Manulife Financial Corp | Lincoln National vs. Prudential Financial | Lincoln National vs. Jackson Financial |
Kansas City vs. CNO Financial Group | Kansas City vs. FG Annuities Life | Kansas City vs. Prudential PLC ADR | Kansas City vs. Lincoln National |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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