Correlation Between Coastal Carolina and Pekin Life

Can any of the company-specific risk be diversified away by investing in both Coastal Carolina and Pekin Life 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 Coastal Carolina and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coastal Carolina Bancshares and Pekin Life Insurance, you can compare the effects of market volatilities on Coastal Carolina and Pekin Life 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 Coastal Carolina with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Carolina and Pekin Life.

Diversification Opportunities for Coastal Carolina and Pekin Life

0.84

Correlation Coefficient

Coastal Carolina  Pekin Life

Very poor diversification

The 3 months correlation between Coastal and Pekin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Carolina Bancshares and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance and Coastal Carolina 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 Coastal Carolina Bancshares are associated (or correlated) with Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Coastal Carolina i.e., Coastal Carolina and Pekin Life go up and down completely randomly.

Pair Corralation between Coastal Carolina and Pekin Life

If you would invest  1,175  in Pekin Life Insurance on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Pekin Life Insurance or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Coastal Carolina Bancshares  vs.  Pekin Life Insurance

Coastal Carolina Ban

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coastal Carolina Bancshares are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Coastal Carolina may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pekin Life Insurance

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pekin Life Insurance are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Pekin Life is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Coastal Carolina and Pekin Life

The main advantage of trading using opposite Coastal Carolina and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Carolina position performs unexpectedly, Pekin Life 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 Pekin Life will offset losses from the drop in Pekin Life's long position.

The idea behind Coastal Carolina Bancshares and Pekin Life Insurance 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.