Correlation Between W R and CNO Financial

Can any of the company-specific risk be diversified away by investing in both W R 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 W R and CNO Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between W R Berkley and CNO Financial Group, you can compare the effects of market volatilities on W R 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 W R with a short position of CNO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of W R and CNO Financial.

Diversification Opportunities for W R and CNO Financial

0.38

Correlation Coefficient

W R  CNO Financial

Weak diversification

The 3 months correlation between WRB and CNO is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding W R Berkley 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 W R 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 W R Berkley 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 W R i.e., W R and CNO Financial go up and down completely randomly.

Pair Corralation between W R and CNO Financial

Considering the 90-day investment horizon W R Berkley is expected to generate 0.71 times more return on investment than CNO Financial. However, W R Berkley is 1.41 times less risky than CNO Financial. It trades about -0.05 of its potential returns per unit of risk. CNO Financial Group is currently generating about -0.04 per unit of risk. If you would invest  7,191  in W R Berkley on May 4, 2025 and sell it today you would lose (266.00) from holding W R Berkley or give up 3.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

W R Berkley  vs.  CNO Financial Group

W R Berkley

Risk-Adjusted Performance

Very Weak

Over the last 90 days W R Berkley has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, W R is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CNO Financial Group

Risk-Adjusted Performance

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.

Pair Trading with W R and CNO Financial

The main advantage of trading using opposite W R and CNO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W R 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 W R Berkley 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.