Correlation Between Semtech and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Semtech and Pekin Life 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 Semtech and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semtech and Pekin Life Insurance, you can compare the effects of market volatilities on Semtech and Pekin Life 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 Semtech with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semtech and Pekin Life.
Diversification Opportunities for Semtech and Pekin Life
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Semtech and Pekin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Semtech and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance and Semtech 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 Semtech are associated (or correlated) with Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Semtech i.e., Semtech and Pekin Life go up and down completely randomly.
Pair Corralation between Semtech and Pekin Life
Given the investment horizon of 90 days Semtech is expected to generate 29.27 times more return on investment than Pekin Life. However, Semtech is 29.27 times more volatile than Pekin Life Insurance. It trades about 0.14 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.04 per unit of risk. 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 |
Semtech vs. Pekin Life Insurance
Performance |
| Timeline |
| Semtech |
| Pekin Life Insurance |
Semtech and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semtech and Pekin Life
The main advantage of trading using opposite Semtech and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semtech position performs unexpectedly, Pekin Life 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 Pekin Life will offset losses from the drop in Pekin Life's long position.| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
| Pekin Life vs. FG Annuities Life | Pekin Life vs. MetLife Preferred Stock | Pekin Life vs. Brighthouse Financial | Pekin Life vs. MetLife Preferred Stock |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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