Correlation Between MetLife and CNO Financial

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both MetLife and CNO Financial 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 MetLife and CNO Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and CNO Financial Group, you can compare the effects of market volatilities on MetLife and CNO Financial 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 MetLife with a short position of CNO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and CNO Financial.

Diversification Opportunities for MetLife and CNO Financial

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between MetLife and CNO is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and CNO Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNO Financial Group and MetLife 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 MetLife are associated (or correlated) with CNO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNO Financial Group has no effect on the direction of MetLife i.e., MetLife and CNO Financial go up and down completely randomly.

Pair Corralation between MetLife and CNO Financial

Considering the 90-day investment horizon MetLife is expected to generate 1.39 times less return on investment than CNO Financial. But when comparing it to its historical volatility, MetLife is 1.18 times less risky than CNO Financial. It trades about 0.02 of its potential returns per unit of risk. CNO Financial Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,351  in CNO Financial Group on December 29, 2023 and sell it today you would earn a total of  389.00  from holding CNO Financial Group or generate 16.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

MetLife  vs.  CNO Financial Group

 Performance 
       Timeline  
MetLife 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, MetLife unveiled solid returns over the last few months and may actually be approaching a breakup point.
CNO Financial Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days CNO Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CNO Financial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

MetLife and CNO Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MetLife and CNO Financial

The main advantage of trading using opposite MetLife and CNO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, CNO Financial 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 CNO Financial will offset losses from the drop in CNO Financial's long position.
The idea behind MetLife and CNO Financial Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

Other Complementary Tools

Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Money Managers
Screen money managers from public funds and ETFs managed around the world
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Transaction History
View history of all your transactions and understand their impact on performance
FinTech Suite
Use AI to screen and filter profitable investment opportunities