Correlation Between Pekin Life and Hamilton Insurance

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

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

Diversification Opportunities for Pekin Life and Hamilton Insurance

0.67

Correlation Coefficient

Pekin Life  Hamilton Insurance

Poor diversification

The 3 months correlation between Pekin and Hamilton is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, and Pekin 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 Pekin Life Insurance are associated (or correlated) with Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Pekin Life i.e., Pekin Life and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Pekin Life and Hamilton Insurance

Given the investment horizon of 90 days Pekin Life is expected to generate 3.6 times less return on investment than Hamilton Insurance. But when comparing it to its historical volatility, Pekin Life Insurance is 3.83 times less risky than Hamilton Insurance. It trades about 0.09 of its potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,769  in Hamilton Insurance Group, on October 26, 2024 and sell it today you would earn a total of  134.00  from holding Hamilton Insurance Group, or generate 7.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Pekin Life Insurance  vs.  Hamilton Insurance Group,

Pekin Life Insurance

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pekin Life Insurance are ranked lower than 7 (%) 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.

Hamilton Insurance Group,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Hamilton Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pekin Life and Hamilton Insurance

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

The idea behind Pekin Life Insurance and Hamilton Insurance 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.