Correlation Between Federal Life and Globe Life
Can any of the company-specific risk be diversified away by investing in both Federal Life 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 Federal Life and Globe Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Life Group and Globe Life, you can compare the effects of market volatilities on Federal Life 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 Federal Life with a short position of Globe Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Life and Globe Life.
Diversification Opportunities for Federal Life and Globe Life
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federal and Globe is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Federal Life Group and Globe Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Life and Federal Life 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 Federal Life 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 has no effect on the direction of Federal Life i.e., Federal Life and Globe Life go up and down completely randomly.
Pair Corralation between Federal Life and Globe Life
If you would invest 1,082 in Federal Life Group on January 25, 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 Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Federal Life Group vs. Globe Life
Performance |
| Timeline |
| Federal Life Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Globe Life |
Federal Life and Globe Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Life and Globe Life
The main advantage of trading using opposite Federal Life and Globe Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Life 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.| Federal Life vs. American Equity Investment | Federal Life vs. American Equity Investment | Federal Life vs. American Equity Investment | Federal Life vs. AIA Group |
| Globe Life vs. Prudential Public Limited | Globe Life vs. CNO Financial Group | Globe Life vs. MetLife Preferred Stock | Globe Life vs. American Equity Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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