Correlation Between 784730AB9 and Pekin Life

Can any of the company-specific risk be diversified away by investing in both 784730AB9 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 784730AB9 and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US784730AB94 and Pekin Life Insurance, you can compare the effects of market volatilities on 784730AB9 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 784730AB9 with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of 784730AB9 and Pekin Life.

Diversification Opportunities for 784730AB9 and Pekin Life

0.58

Correlation Coefficient

784730AB9  Pekin Life

Very weak diversification

The 3 months correlation between 784730AB9 and Pekin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding US784730AB94 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 784730AB9 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 US784730AB94 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 784730AB9 i.e., 784730AB9 and Pekin Life go up and down completely randomly.

Pair Corralation between 784730AB9 and Pekin Life

Assuming the 90 days trading horizon US784730AB94 is expected to generate 2.32 times more return on investment than Pekin Life. However, 784730AB9 is 2.32 times more volatile than Pekin Life Insurance. It trades about 0.01 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.01 per unit of risk. If you would invest  11,563  in US784730AB94 on October 4, 2024 and sell it today you would lose (710.00) from holding US784730AB94 or give up 6.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	35.35%
Values	Daily Returns

US784730AB94  vs.  Pekin Life Insurance

US784730AB94

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in US784730AB94 are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 784730AB9 sustained solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with 784730AB9 and Pekin Life

The main advantage of trading using opposite 784730AB9 and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 784730AB9 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 US784730AB94 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.