Correlation Between Pekin Life and Allient

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Can any of the company-specific risk be diversified away by investing in both Pekin Life and Allient 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 Allient 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 Allient, you can compare the effects of market volatilities on Pekin Life and Allient 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 Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Allient.

Diversification Opportunities for Pekin Life and Allient

PekinAllientDiversified AwayPekinAllientDiversified Away100%
0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Pekin and Allient is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Pekin Life i.e., Pekin Life and Allient go up and down completely randomly.

Pair Corralation between Pekin Life and Allient

Given the investment horizon of 90 days Pekin Life is expected to generate 372.62 times less return on investment than Allient. But when comparing it to its historical volatility, Pekin Life Insurance is 6.76 times less risky than Allient. It trades about 0.0 of its potential returns per unit of risk. Allient is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,402  in Allient on November 24, 2024 and sell it today you would earn a total of  257.00  from holding Allient or generate 10.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Pekin Life Insurance  vs.  Allient

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510
JavaScript chart by amCharts 3.21.15PKIN ALNT
       Timeline  
Pekin Life Insurance 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Pekin Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Pekin Life is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11.511.611.711.811.91212.112.212.3
Allient 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Allient may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2324252627

Pekin Life and Allient Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.22-0.89-0.56-0.230.00.230.560.891.221.55 0.51.01.52.02.5
JavaScript chart by amCharts 3.21.15PKIN ALNT
       Returns  

Pair Trading with Pekin Life and Allient

The main advantage of trading using opposite Pekin Life and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.
The idea behind Pekin Life Insurance and Allient pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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