Correlation Between GEN Restaurant and Pekin Life
Can any of the company-specific risk be diversified away by investing in both GEN Restaurant 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 GEN Restaurant and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEN Restaurant Group, and Pekin Life Insurance, you can compare the effects of market volatilities on GEN Restaurant 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 GEN Restaurant with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and Pekin Life.
Diversification Opportunities for GEN Restaurant and Pekin Life
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEN and Pekin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, 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 GEN Restaurant 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 GEN Restaurant Group, 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 GEN Restaurant i.e., GEN Restaurant and Pekin Life go up and down completely randomly.
Pair Corralation between GEN Restaurant and Pekin Life
Given the investment horizon of 90 days GEN Restaurant Group, is expected to generate 30.72 times more return on investment than Pekin Life. However, GEN Restaurant is 30.72 times more volatile than Pekin Life Insurance. It trades about 0.05 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 0.00 in GEN Restaurant Group, on August 30, 2024 and sell it today you would earn a total of 822.00 from holding GEN Restaurant Group, or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.73% |
| Values | Daily Returns |
GEN Restaurant Group, vs. Pekin Life Insurance
Performance |
| Timeline |
| GEN Restaurant Group, |
| Pekin Life Insurance |
GEN Restaurant and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEN Restaurant and Pekin Life
The main advantage of trading using opposite GEN Restaurant and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant 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.| GEN Restaurant vs. Jack In The | GEN Restaurant vs. Potbelly Co | GEN Restaurant vs. Rave Restaurant Group |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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