Correlation Between FG Annuities and Unum

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

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

Diversification Opportunities for FG Annuities and Unum

0.66

Correlation Coefficient

FG Annuities  Unum

Poor diversification

The 3 months correlation between FG Annuities and Unum is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding FG Annuities Life and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group and FG Annuities 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 FG Annuities Life are associated (or correlated) with Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of FG Annuities i.e., FG Annuities and Unum go up and down completely randomly.

Pair Corralation between FG Annuities and Unum

Allowing for the 90-day total investment horizon FG Annuities Life is expected to under-perform the Unum. In addition to that, FG Annuities is 1.86 times more volatile than Unum Group. It trades about -0.33 of its total potential returns per unit of risk. Unum Group is currently generating about -0.16 per unit of volatility. If you would invest  7,621  in Unum Group on September 26, 2024 and sell it today you would lose (287.00) from holding Unum Group or give up 3.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

FG Annuities Life  vs.  Unum Group

FG Annuities Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FG Annuities Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, FG Annuities is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Unum Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Unum Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Unum displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FG Annuities and Unum

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

The idea behind FG Annuities Life and Unum 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.