Correlation Between Citizens and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Citizens 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 Citizens and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Pekin Life Insurance, you can compare the effects of market volatilities on Citizens 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 Citizens with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Pekin Life.
Diversification Opportunities for Citizens and Pekin Life
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citizens and Pekin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Citizens 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 Citizens 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 Citizens 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 Citizens i.e., Citizens and Pekin Life go up and down completely randomly.
Pair Corralation between Citizens and Pekin Life
Considering the 90-day investment horizon Citizens is expected to generate 23.5 times more return on investment than Pekin Life. However, Citizens is 23.5 times more volatile than Pekin Life Insurance. It trades about 0.1 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.09 per unit of risk. If you would invest 297.00 in Citizens on August 31, 2024 and sell it today you would earn a total of 151.00 from holding Citizens or generate 50.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citizens vs. Pekin Life Insurance
Performance |
| Timeline |
| Citizens |
| Pekin Life Insurance |
Citizens and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Pekin Life
The main advantage of trading using opposite Citizens and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens 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.| Citizens vs. Lincoln National | Citizens vs. Aflac Incorporated | Citizens vs. Unum Group | Citizens vs. Manulife Financial Corp |
| Pekin Life vs. HUMANA INC | Pekin Life vs. SCOR PK | Pekin Life vs. Aquagold International | Pekin Life vs. Thrivent High Yield |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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