Correlation Between Pekin Life and Vodka Brands
Can any of the company-specific risk be diversified away by investing in both Pekin Life and Vodka Brands 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 Vodka Brands 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 Vodka Brands Corp, you can compare the effects of market volatilities on Pekin Life and Vodka Brands 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 Vodka Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Vodka Brands.
Diversification Opportunities for Pekin Life and Vodka Brands
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pekin and Vodka is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp 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 Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of Pekin Life i.e., Pekin Life and Vodka Brands go up and down completely randomly.
Pair Corralation between Pekin Life and Vodka Brands
Given the investment horizon of 90 days Pekin Life is expected to generate 11.87 times less return on investment than Vodka Brands. But when comparing it to its historical volatility, Pekin Life Insurance is 44.77 times less risky than Vodka Brands. It trades about 0.04 of its potential returns per unit of risk. Vodka Brands Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Vodka Brands Corp on September 2, 2024 and sell it today you would lose (38.00) from holding Vodka Brands Corp or give up 25.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Pekin Life Insurance vs. Vodka Brands Corp
Performance |
| Timeline |
| Pekin Life Insurance |
| Vodka Brands Corp |
Pekin Life and Vodka Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pekin Life and Vodka Brands
The main advantage of trading using opposite Pekin Life and Vodka Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, Vodka Brands 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 Vodka Brands will offset losses from the drop in Vodka Brands' long position.| Pekin Life vs. HUMANA INC | Pekin Life vs. SCOR PK | Pekin Life vs. Aquagold International | Pekin Life vs. Thrivent High Yield |
| Vodka Brands vs. Diageo PLC ADR | Vodka Brands vs. Pernod Ricard SA | Vodka Brands vs. Constellation Brands Class | Vodka Brands vs. Brown Forman |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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