Correlation Between Affiliated Managers and Globe Life
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers and Globe Life 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 Affiliated Managers and Globe Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group, and Globe Life 425, you can compare the effects of market volatilities on Affiliated Managers and Globe Life 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 Affiliated Managers with a short position of Globe Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Globe Life.
Diversification Opportunities for Affiliated Managers and Globe Life
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Affiliated and Globe is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group, and Globe Life 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Life 425 and Affiliated Managers 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 Affiliated Managers Group, are associated (or correlated) with Globe Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Life 425 has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and Globe Life go up and down completely randomly.
Pair Corralation between Affiliated Managers and Globe Life
Given the investment horizon of 90 days Affiliated Managers Group, is expected to generate 0.71 times more return on investment than Globe Life. However, Affiliated Managers Group, is 1.4 times less risky than Globe Life. It trades about -0.17 of its potential returns per unit of risk. Globe Life 425 is currently generating about -0.13 per unit of risk. If you would invest 1,785 in Affiliated Managers Group, on September 25, 2024 and sell it today you would lose (165.00) from holding Affiliated Managers Group, or give up 9.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Affiliated Managers Group, vs. Globe Life 425
Performance |
Timeline |
Affiliated Managers |
Globe Life 425 |
Affiliated Managers and Globe Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Affiliated Managers and Globe Life
The main advantage of trading using opposite Affiliated Managers and Globe Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers position performs unexpectedly, Globe Life 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 Globe Life will offset losses from the drop in Globe Life's long position.Affiliated Managers vs. Oxford Square Capital | Affiliated Managers vs. Atlanticus Holdings | Affiliated Managers vs. Oxford Square Capital | Affiliated Managers vs. Oxford Lane Capital |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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