Correlation Between Vericity and FG Annuities

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

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

Diversification Opportunities for Vericity and FG Annuities

0.12

Correlation Coefficient

Vericity  FG Annuities

Average diversification

The 3 months correlation between Vericity and FG Annuities is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Vericity and FG Annuities Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Annuities Life and Vericity 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 Vericity are associated (or correlated) with FG Annuities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Annuities Life has no effect on the direction of Vericity i.e., Vericity and FG Annuities go up and down completely randomly.

Pair Corralation between Vericity and FG Annuities

Given the investment horizon of 90 days Vericity is expected to generate 2.06 times more return on investment than FG Annuities. However, Vericity is 2.06 times more volatile than FG Annuities Life. It trades about 0.04 of its potential returns per unit of risk. FG Annuities Life is currently generating about 0.07 per unit of risk. If you would invest  784.00  in Vericity on September 25, 2024 and sell it today you would earn a total of  359.00  from holding Vericity or generate 45.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	76.01%
Values	Daily Returns

Vericity  vs.  FG Annuities Life

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.

FG Annuities Life

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FG Annuities Life are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, FG Annuities is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vericity and FG Annuities

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

The idea behind Vericity and FG Annuities Life 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.