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
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lincoln and Federal is -0.11. 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
Considering the 90-day investment horizon Lincoln National is expected to under-perform the Federal Life. But the stock apears to be less risky and, when comparing its historical volatility, Lincoln National is 1.13 times less risky than Federal Life. The stock trades about -0.02 of its potential returns per unit of risk. The Federal Life Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,375 in Federal Life Group on December 29, 2023 and sell it today you would lose (293.00) from holding Federal Life Group or give up 21.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 42.71% |
Values | Daily Returns |
Lincoln National vs. Federal Life Group
Performance |
Timeline |
Lincoln National |
Federal Life Group |
Risk-Adjusted Performance
0 of 100
Low | High |
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. CNO Financial Group | Lincoln National vs. Globe Life | Lincoln National vs. Vericity | Lincoln National vs. Abacus Life |
Federal Life vs. Ecolab Inc | Federal Life vs. Braskem SA Class | Federal Life vs. Eastman Chemical | Federal Life vs. Sensient Technologies |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |