Correlation Between 512807AN8 and Peoples Insurance

Can any of the company-specific risk be diversified away by investing in both 512807AN8 and Peoples 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 512807AN8 and Peoples Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LAM RESH P and The Peoples Insurance, you can compare the effects of market volatilities on 512807AN8 and Peoples 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 512807AN8 with a short position of Peoples Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of 512807AN8 and Peoples Insurance.

Diversification Opportunities for 512807AN8 and Peoples Insurance

-0.36

Correlation Coefficient

512807AN8  Peoples Insurance

Very good diversification

The 3 months correlation between 512807AN8 and Peoples is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding LAM RESH P and The Peoples Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance and 512807AN8 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 LAM RESH P are associated (or correlated) with Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance has no effect on the direction of 512807AN8 i.e., 512807AN8 and Peoples Insurance go up and down completely randomly.

Pair Corralation between 512807AN8 and Peoples Insurance

If you would invest  36.00  in The Peoples Insurance on October 8, 2024 and sell it today you would earn a total of  0.00  from holding The Peoples Insurance or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

LAM RESH P  vs.  The Peoples Insurance

LAM RESH P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LAM RESH P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 512807AN8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Peoples Insurance

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Peoples Insurance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Peoples Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 512807AN8 and Peoples Insurance

The main advantage of trading using opposite 512807AN8 and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 512807AN8 position performs unexpectedly, Peoples 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 Peoples Insurance will offset losses from the drop in Peoples Insurance's long position.

The idea behind LAM RESH P and The Peoples 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.