Correlation Between FG Annuities and Pekin Life

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

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

Diversification Opportunities for FG Annuities and Pekin Life

0.65

Correlation Coefficient

FG Annuities  Pekin Life

Poor diversification

The 3 months correlation between FG Annuities and Pekin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding FG Annuities Life 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 FG Annuities 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 FG Annuities Life 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 FG Annuities i.e., FG Annuities and Pekin Life go up and down completely randomly.

Pair Corralation between FG Annuities and Pekin Life

Allowing for the 90-day total investment horizon FG Annuities Life is expected to generate 11.19 times more return on investment than Pekin Life. However, FG Annuities is 11.19 times more volatile than Pekin Life Insurance. It trades about 0.09 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.13 per unit of risk. If you would invest  4,209  in FG Annuities Life on September 3, 2024 and sell it today you would earn a total of  624.00  from holding FG Annuities Life or generate 14.83% return on investment over 90 days.

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

FG Annuities Life  vs.  Pekin Life Insurance

FG Annuities Life

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FG Annuities Life are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, FG Annuities reported solid returns over the last few months and may actually be approaching a breakup point.

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 FG Annuities and Pekin Life

The main advantage of trading using opposite FG Annuities and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Annuities 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 FG Annuities Life 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.