Correlation Between Virginia National and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Virginia National 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 Virginia National and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virginia National Bankshares and Pekin Life Insurance, you can compare the effects of market volatilities on Virginia National 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 Virginia National with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Pekin Life.
Diversification Opportunities for Virginia National and Pekin Life
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virginia and Pekin is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares 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 Virginia National 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 Virginia National Bankshares 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 Virginia National i.e., Virginia National and Pekin Life go up and down completely randomly.
Pair Corralation between Virginia National and Pekin Life
Given the investment horizon of 90 days Virginia National Bankshares is expected to under-perform the Pekin Life. In addition to that, Virginia National is 5.24 times more volatile than Pekin Life Insurance. It trades about -0.15 of its total potential returns per unit of risk. Pekin Life Insurance is currently generating about -0.22 per unit of volatility. If you would invest 1,175 in Pekin Life Insurance on October 23, 2024 and sell it today you would lose (20.00) from holding Pekin Life Insurance or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. Pekin Life Insurance
Performance |
| Timeline |
| Virginia National |
| Pekin Life Insurance |
Virginia National and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Pekin Life
The main advantage of trading using opposite Virginia National and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National 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.| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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