Correlation Between Pekin Life and Semtech
Can any of the company-specific risk be diversified away by investing in both Pekin Life and Semtech 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 Semtech 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 Semtech, you can compare the effects of market volatilities on Pekin Life and Semtech 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 Semtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Semtech.
Diversification Opportunities for Pekin Life and Semtech
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pekin and Semtech is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech 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 Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of Pekin Life i.e., Pekin Life and Semtech go up and down completely randomly.
Pair Corralation between Pekin Life and Semtech
Given the investment horizon of 90 days Pekin Life is expected to generate 92.73 times less return on investment than Semtech. But when comparing it to its historical volatility, Pekin Life Insurance is 29.27 times less risky than Semtech. It trades about 0.04 of its potential returns per unit of risk. Semtech is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,062 in Semtech on September 4, 2024 and sell it today you would earn a total of 4,633 from holding Semtech or generate 224.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pekin Life Insurance vs. Semtech
Performance |
| Timeline |
| Pekin Life Insurance |
| Semtech |
Pekin Life and Semtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pekin Life and Semtech
The main advantage of trading using opposite Pekin Life and Semtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, Semtech 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 Semtech will offset losses from the drop in Semtech'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 |
| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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