Correlation Between Lincoln National and Federal Life
Can any of the company-specific risk be diversified away by investing in both Lincoln National and Federal 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 Lincoln National and Federal Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lincoln National and Federal Life Group, you can compare the effects of market volatilities on Lincoln National and Federal 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 Lincoln National with a short position of Federal Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln National and Federal Life.
Diversification Opportunities for Lincoln National and Federal Life
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Federal is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln National and Federal Life Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Life Group 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 Federal Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Life Group has no effect on the direction of Lincoln National i.e., Lincoln National and Federal Life go up and down completely randomly.
Pair Corralation between Lincoln National and Federal Life
If you would invest 1,082 in Federal Life Group on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Federal Life Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lincoln National vs. Federal Life Group
Performance |
| Timeline |
| Lincoln National |
| Federal Life Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lincoln National and Federal Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln National and Federal Life
The main advantage of trading using opposite Lincoln National and Federal Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln National position performs unexpectedly, Federal 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 Federal Life will offset losses from the drop in Federal Life's long position.| Lincoln National vs. MetLife | Lincoln National vs. Aflac Incorporated | Lincoln National vs. Unum Group | Lincoln National vs. Manulife Financial Corp |
| Federal Life vs. American Equity Investment | Federal Life vs. American Equity Investment | Federal Life vs. American Equity Investment | Federal Life vs. AIA Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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