Correlation Between Pekin Life and Bowhead Specialty
Can any of the company-specific risk be diversified away by investing in both Pekin Life and Bowhead Specialty 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 Bowhead Specialty 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 Bowhead Specialty Holdings, you can compare the effects of market volatilities on Pekin Life and Bowhead Specialty 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 Bowhead Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Bowhead Specialty.
Diversification Opportunities for Pekin Life and Bowhead Specialty
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pekin and Bowhead is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty 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 Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of Pekin Life i.e., Pekin Life and Bowhead Specialty go up and down completely randomly.
Pair Corralation between Pekin Life and Bowhead Specialty
Given the investment horizon of 90 days Pekin Life is expected to generate 24.63 times less return on investment than Bowhead Specialty. But when comparing it to its historical volatility, Pekin Life Insurance is 5.38 times less risky than Bowhead Specialty. It trades about 0.02 of its potential returns per unit of risk. Bowhead Specialty Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,951 in Bowhead Specialty Holdings on October 24, 2024 and sell it today you would earn a total of 329.00 from holding Bowhead Specialty Holdings or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pekin Life Insurance vs. Bowhead Specialty Holdings
Performance |
| Timeline |
| Pekin Life Insurance |
| Bowhead Specialty |
Pekin Life and Bowhead Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pekin Life and Bowhead Specialty
The main advantage of trading using opposite Pekin Life and Bowhead Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, Bowhead Specialty 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 Bowhead Specialty will offset losses from the drop in Bowhead Specialty's 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 |
| Bowhead Specialty vs. BRC Inc | Bowhead Specialty vs. Scandinavian Tobacco Group | Bowhead Specialty vs. Molson Coors Brewing | Bowhead Specialty vs. Constellation Brands Class |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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