Correlation Between Lincoln National and Independence Holding

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Can any of the company-specific risk be diversified away by investing in both Lincoln National and Independence Holding 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 Independence Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lincoln National and Independence Holding, you can compare the effects of market volatilities on Lincoln National and Independence Holding 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 Independence Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln National and Independence Holding.

Diversification Opportunities for Lincoln National and Independence Holding

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Lincoln and Independence is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln National and Independence Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Holding 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 Independence Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Holding has no effect on the direction of Lincoln National i.e., Lincoln National and Independence Holding go up and down completely randomly.

Pair Corralation between Lincoln National and Independence Holding

If you would invest  2,724  in Lincoln National on December 30, 2023 and sell it today you would earn a total of  469.00  from holding Lincoln National or generate 17.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Lincoln National  vs.  Independence Holding

 Performance 
       Timeline  
Lincoln National 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln National are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Lincoln National exhibited solid returns over the last few months and may actually be approaching a breakup point.
Independence Holding 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Independence Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Independence Holding is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Lincoln National and Independence Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lincoln National and Independence Holding

The main advantage of trading using opposite Lincoln National and Independence Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln National position performs unexpectedly, Independence Holding 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 Independence Holding will offset losses from the drop in Independence Holding's long position.
The idea behind Lincoln National and Independence Holding 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.
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 CEOs Directory module to screen CEOs from public companies around the world.

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