Correlation Between CNO Financial and Vericity

Can any of the company-specific risk be diversified away by investing in both CNO Financial and Vericity 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 Vericity 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 Vericity, you can compare the effects of market volatilities on CNO Financial and Vericity 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 Vericity. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNO Financial and Vericity.

Diversification Opportunities for CNO Financial and Vericity

0.1

Correlation Coefficient

CNO Financial  Vericity

Average diversification

The 3 months correlation between CNO and Vericity is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding CNO Financial Group and Vericity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vericity 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 Vericity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vericity has no effect on the direction of CNO Financial i.e., CNO Financial and Vericity go up and down completely randomly.

Pair Corralation between CNO Financial and Vericity

If you would invest  3,438  in CNO Financial Group on September 25, 2024 and sell it today you would earn a total of  240.00  from holding CNO Financial Group or generate 6.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

CNO Financial Group  vs.  Vericity

CNO Financial Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CNO Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, CNO Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vericity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vericity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Vericity is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CNO Financial and Vericity

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

The idea behind CNO Financial Group and Vericity 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.