Correlation Between Pekin Life and 020002AJ0

Can any of the company-specific risk be diversified away by investing in both Pekin Life and 020002AJ0 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 020002AJ0 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 ALL 69 15 MAY 38, you can compare the effects of market volatilities on Pekin Life and 020002AJ0 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 020002AJ0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and 020002AJ0.

Diversification Opportunities for Pekin Life and 020002AJ0

-0.67

Correlation Coefficient

Pekin Life  020002AJ0

Excellent diversification

The 3 months correlation between Pekin and 020002AJ0 is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and ALL 69 15 MAY 38 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL 69 15 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 020002AJ0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL 69 15 has no effect on the direction of Pekin Life i.e., Pekin Life and 020002AJ0 go up and down completely randomly.

Pair Corralation between Pekin Life and 020002AJ0

Given the investment horizon of 90 days Pekin Life Insurance is not expected to generate positive returns. However, Pekin Life Insurance is 163.52 times less risky than 020002AJ0. It waists most of its returns potential to compensate for thr risk taken. 020002AJ0 is generating about 0.35 per unit of risk. If you would invest  10,326  in ALL 69 15 MAY 38 on October 11, 2024 and sell it today you would earn a total of  1,449  from holding ALL 69 15 MAY 38 or generate 14.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	42.86%
Values	Daily Returns

Pekin Life Insurance  vs.  ALL 69 15 MAY 38

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.

ALL 69 15

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALL 69 15 MAY 38 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 020002AJ0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pekin Life and 020002AJ0

The main advantage of trading using opposite Pekin Life and 020002AJ0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, 020002AJ0 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 020002AJ0 will offset losses from the drop in 020002AJ0's long position.

The idea behind Pekin Life Insurance and ALL 69 15 MAY 38 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.