Correlation Between Pekin Life and Aldel Financial
Can any of the company-specific risk be diversified away by investing in both Pekin Life and Aldel Financial 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 Aldel Financial 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 Aldel Financial II, you can compare the effects of market volatilities on Pekin Life and Aldel Financial 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 Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Aldel Financial.
Diversification Opportunities for Pekin Life and Aldel Financial
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pekin and Aldel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II 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 Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of Pekin Life i.e., Pekin Life and Aldel Financial go up and down completely randomly.
Pair Corralation between Pekin Life and Aldel Financial
Given the investment horizon of 90 days Pekin Life Insurance is expected to generate 3.78 times more return on investment than Aldel Financial. However, Pekin Life is 3.78 times more volatile than Aldel Financial II. It trades about 0.23 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.12 per unit of risk. If you would invest 1,150 in Pekin Life Insurance on August 28, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pekin Life Insurance vs. Aldel Financial II
Performance |
| Timeline |
| Pekin Life Insurance |
| Aldel Financial II |
Pekin Life and Aldel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pekin Life and Aldel Financial
The main advantage of trading using opposite Pekin Life and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, Aldel Financial 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 Aldel Financial will offset losses from the drop in Aldel Financial's long position.| Pekin Life vs. Invesco High Income | Pekin Life vs. Blackrock Muniholdings Ny | Pekin Life vs. MFS Investment Grade | Pekin Life vs. Federated Premier Municipal |
| Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. Vine Hill Capital | Aldel Financial vs. DP Cap Acquisition | Aldel Financial vs. PowerUp Acquisition Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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