Correlation Between Pekin Life and Chanson International
Can any of the company-specific risk be diversified away by investing in both Pekin Life and Chanson International 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 Chanson International 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 Chanson International Holding, you can compare the effects of market volatilities on Pekin Life and Chanson International 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 Chanson International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Chanson International.
Diversification Opportunities for Pekin Life and Chanson International
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pekin and Chanson is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Chanson International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chanson International 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 Chanson International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chanson International has no effect on the direction of Pekin Life i.e., Pekin Life and Chanson International go up and down completely randomly.
Pair Corralation between Pekin Life and Chanson International
Given the investment horizon of 90 days Pekin Life Insurance is expected to generate 0.04 times more return on investment than Chanson International. However, Pekin Life Insurance is 25.25 times less risky than Chanson International. It trades about 0.22 of its potential returns per unit of risk. Chanson International Holding is currently generating about -0.1 per unit of risk. If you would invest 1,152 in Pekin Life Insurance on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Pekin Life Insurance or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Pekin Life Insurance vs. Chanson International Holding
Performance |
| Timeline |
| Pekin Life Insurance |
| Chanson International |
Pekin Life and Chanson International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pekin Life and Chanson International
The main advantage of trading using opposite Pekin Life and Chanson International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, Chanson International 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 Chanson International will offset losses from the drop in Chanson International'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 |
| Chanson International vs. Olympic Steel | Chanson International vs. SEI Investments | Chanson International vs. Sabra Healthcare REIT | Chanson International vs. Minerals Technologies |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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