Correlation Between 49456BAX9 and Pekin Life

Can any of the company-specific risk be diversified away by investing in both 49456BAX9 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 49456BAX9 and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KMI 52 01 JUN 33 and Pekin Life Insurance, you can compare the effects of market volatilities on 49456BAX9 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 49456BAX9 with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of 49456BAX9 and Pekin Life.

Diversification Opportunities for 49456BAX9 and Pekin Life

0.04

Correlation Coefficient

49456BAX9  Pekin Life

Significant diversification

The 3 months correlation between 49456BAX9 and Pekin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding KMI 52 01 JUN 33 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 49456BAX9 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 KMI 52 01 JUN 33 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 49456BAX9 i.e., 49456BAX9 and Pekin Life go up and down completely randomly.

Pair Corralation between 49456BAX9 and Pekin Life

Assuming the 90 days trading horizon KMI 52 01 JUN 33 is expected to generate 1.42 times more return on investment than Pekin Life. However, 49456BAX9 is 1.42 times more volatile than Pekin Life Insurance. It trades about 0.04 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  9,780  in KMI 52 01 JUN 33 on December 25, 2024 and sell it today you would earn a total of  117.00  from holding KMI 52 01 JUN 33 or generate 1.2% return on investment over 90 days.

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

KMI 52 01 JUN 33  vs.  Pekin Life Insurance

KMI 52 01

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KMI 52 01 JUN 33 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 49456BAX9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 49456BAX9 and Pekin Life

The main advantage of trading using opposite 49456BAX9 and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 49456BAX9 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 KMI 52 01 JUN 33 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.