Correlation Between AES and Unum
Can any of the company-specific risk be diversified away by investing in both AES and Unum 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 AES and Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The AES and Unum Group, you can compare the effects of market volatilities on AES and Unum 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 AES with a short position of Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and Unum.
Diversification Opportunities for AES and Unum
Excellent diversification
The 3 months correlation between AES and Unum is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding The AES and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group and AES 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 The AES are associated (or correlated) with Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of AES i.e., AES and Unum go up and down completely randomly.
Pair Corralation between AES and Unum
Considering the 90-day investment horizon The AES is expected to generate 1.68 times more return on investment than Unum. However, AES is 1.68 times more volatile than Unum Group. It trades about 0.1 of its potential returns per unit of risk. Unum Group is currently generating about -0.06 per unit of risk. If you would invest 1,073 in The AES on June 7, 2025 and sell it today you would earn a total of 208.00 from holding The AES or generate 19.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The AES vs. Unum Group
Performance |
| Timeline |
| AES |
| Unum Group |
AES and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AES and Unum
The main advantage of trading using opposite AES and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum's long position.The idea behind The AES and Unum 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.| Unum vs. Prudential Financial | Unum vs. MetLife | Unum vs. Jackson Financial | Unum vs. Manulife Financial Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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