Correlation Between Atlantic American and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Atlantic American 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 Atlantic American and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic American and Pekin Life Insurance, you can compare the effects of market volatilities on Atlantic American 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 Atlantic American with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic American and Pekin Life.
Diversification Opportunities for Atlantic American and Pekin Life
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atlantic and Pekin is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic American 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 Atlantic American 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 Atlantic American 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 Atlantic American i.e., Atlantic American and Pekin Life go up and down completely randomly.
Pair Corralation between Atlantic American and Pekin Life
Given the investment horizon of 90 days Atlantic American is expected to generate 7.76 times more return on investment than Pekin Life. However, Atlantic American is 7.76 times more volatile than Pekin Life Insurance. It trades about 0.14 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.25 per unit of risk. If you would invest 148.00 in Atlantic American on November 18, 2024 and sell it today you would earn a total of 12.00 from holding Atlantic American or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantic American vs. Pekin Life Insurance
Performance |
| Timeline |
| Atlantic American |
| Pekin Life Insurance |
Atlantic American and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic American and Pekin Life
The main advantage of trading using opposite Atlantic American and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic American 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.| Atlantic American vs. CNO Financial Group | Atlantic American vs. MetLife Preferred Stock | Atlantic American vs. FG Annuities Life | Atlantic American vs. Prudential PLC ADR |
| Pekin Life vs. FG Annuities Life | Pekin Life vs. MetLife Preferred Stock | Pekin Life vs. Brighthouse Financial | Pekin Life vs. MetLife Preferred Stock |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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