Correlation Between Pekin Life and Analog Devices
Can any of the company-specific risk be diversified away by investing in both Pekin Life and Analog Devices 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 Pekin Life and Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pekin Life Insurance and Analog Devices, you can compare the effects of market volatilities on Pekin Life and Analog Devices 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 Pekin Life with a short position of Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Analog Devices.
Diversification Opportunities for Pekin Life and Analog Devices
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pekin and Analog is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and Pekin Life 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 Pekin Life Insurance are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Pekin Life i.e., Pekin Life and Analog Devices go up and down completely randomly.
Pair Corralation between Pekin Life and Analog Devices
Given the investment horizon of 90 days Pekin Life Insurance is expected to generate 0.23 times more return on investment than Analog Devices. However, Pekin Life Insurance is 4.34 times less risky than Analog Devices. It trades about 0.24 of its potential returns per unit of risk. Analog Devices is currently generating about -0.17 per unit of risk. If you would invest 1,150 in Pekin Life Insurance on August 27, 2024 and sell it today you would earn a total of 25.00 from holding Pekin Life Insurance or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pekin Life Insurance vs. Analog Devices
Performance |
| Timeline |
| Pekin Life Insurance |
| Analog Devices |
Pekin Life and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pekin Life and Analog Devices
The main advantage of trading using opposite Pekin Life and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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