Correlation Between Globe Life and Popular
Can any of the company-specific risk be diversified away by investing in both Globe Life and Popular 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 Globe Life and Popular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Life and Popular, you can compare the effects of market volatilities on Globe Life and Popular 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 Globe Life with a short position of Popular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Life and Popular.
Diversification Opportunities for Globe Life and Popular
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Globe and Popular is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Globe Life and Popular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular and Globe 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 Globe Life are associated (or correlated) with Popular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular has no effect on the direction of Globe Life i.e., Globe Life and Popular go up and down completely randomly.
Pair Corralation between Globe Life and Popular
Allowing for the 90-day total investment horizon Globe Life is expected to generate 0.65 times more return on investment than Popular. However, Globe Life is 1.55 times less risky than Popular. It trades about -0.05 of its potential returns per unit of risk. Popular is currently generating about -0.04 per unit of risk. If you would invest 13,875 in Globe Life on September 10, 2025 and sell it today you would lose (566.00) from holding Globe Life or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Life vs. Popular
Performance |
| Timeline |
| Globe Life |
| Popular |
Globe Life and Popular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Life and Popular
The main advantage of trading using opposite Globe Life and Popular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Life position performs unexpectedly, Popular 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 Popular will offset losses from the drop in Popular's long position.| Globe Life vs. Unum Group | Globe Life vs. Primerica | Globe Life vs. Assurant | Globe Life vs. Lincoln National |
| Popular vs. Zions Bancorporation | Popular vs. CullenFrost Bankers | Popular vs. Old National Bancorp | Popular vs. Commerce Bancshares |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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