Correlation Between Sezzle Common and Pekin Life

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

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

Diversification Opportunities for Sezzle Common and Pekin Life

0.23

Correlation Coefficient

Sezzle Common  Pekin Life

Modest diversification

The 3 months correlation between Sezzle and Pekin is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sezzle Common Stock 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 Sezzle Common 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 Sezzle Common Stock 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 Sezzle Common i.e., Sezzle Common and Pekin Life go up and down completely randomly.

Pair Corralation between Sezzle Common and Pekin Life

Given the investment horizon of 90 days Sezzle Common Stock is expected to generate 19.02 times more return on investment than Pekin Life. However, Sezzle Common is 19.02 times more volatile than Pekin Life Insurance. It trades about 0.0 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.0 per unit of risk. If you would invest  24,332  in Sezzle Common Stock on December 19, 2024 and sell it today you would lose (2,567) from holding Sezzle Common Stock or give up 10.55% of portfolio value over 90 days.

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

Sezzle Common Stock  vs.  Pekin Life Insurance

Sezzle Common Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sezzle Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sezzle Common is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pekin Life Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pekin Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Sezzle Common and Pekin Life

The main advantage of trading using opposite Sezzle Common and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sezzle Common 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 Sezzle Common Stock 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.