Correlation Between Pekin Life and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Pekin Life and Agnico Eagle 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 Agnico Eagle 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 Agnico Eagle Mines, you can compare the effects of market volatilities on Pekin Life and Agnico Eagle 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 Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Agnico Eagle.
Diversification Opportunities for Pekin Life and Agnico Eagle
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pekin and Agnico is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines 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 Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of Pekin Life i.e., Pekin Life and Agnico Eagle go up and down completely randomly.
Pair Corralation between Pekin Life and Agnico Eagle
Given the investment horizon of 90 days Pekin Life Insurance is not expected to generate positive returns. However, Pekin Life Insurance is 74.22 times less risky than Agnico Eagle. It waists most of its returns potential to compensate for thr risk taken. Agnico Eagle is generating about -0.07 per unit of risk. If you would invest 1,175 in Pekin Life Insurance on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Pekin Life Insurance or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Pekin Life Insurance vs. Agnico Eagle Mines
Performance |
Timeline |
Pekin Life Insurance |
Agnico Eagle Mines |
Pekin Life and Agnico Eagle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pekin Life and Agnico Eagle
The main advantage of trading using opposite Pekin Life and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.Pekin Life vs. Citizens Financial Corp | Pekin Life vs. Farmers Bancorp | Pekin Life vs. Alpine Banks of | Pekin Life vs. Taylor Calvin B |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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