Correlation Between Vodka Brands and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Vodka Brands 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 Vodka Brands and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodka Brands Corp and Pekin Life Insurance, you can compare the effects of market volatilities on Vodka Brands 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 Vodka Brands with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodka Brands and Pekin Life.
Diversification Opportunities for Vodka Brands and Pekin Life
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vodka and Pekin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp 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 Vodka Brands 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 Vodka Brands Corp 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 Vodka Brands i.e., Vodka Brands and Pekin Life go up and down completely randomly.
Pair Corralation between Vodka Brands and Pekin Life
Given the investment horizon of 90 days Vodka Brands Corp is expected to generate 44.77 times more return on investment than Pekin Life. However, Vodka Brands is 44.77 times more volatile than Pekin Life Insurance. It trades about 0.01 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 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 |
Vodka Brands Corp vs. Pekin Life Insurance
Performance |
| Timeline |
| Vodka Brands Corp |
| Pekin Life Insurance |
Vodka Brands and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodka Brands and Pekin Life
The main advantage of trading using opposite Vodka Brands and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodka Brands 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.| Vodka Brands vs. Diageo PLC ADR | Vodka Brands vs. Pernod Ricard SA | Vodka Brands vs. Constellation Brands Class | Vodka Brands vs. Brown Forman |
| Pekin Life vs. HUMANA INC | Pekin Life vs. SCOR PK | Pekin Life vs. Aquagold International | Pekin Life vs. Thrivent High Yield |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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