Correlation Between Volkswagen and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Volkswagen 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 Volkswagen and Pekin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG 110 and Pekin Life Insurance, you can compare the effects of market volatilities on Volkswagen 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 Volkswagen with a short position of Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Pekin Life.
Diversification Opportunities for Volkswagen and Pekin Life
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volkswagen and Pekin is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG 110 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 Volkswagen 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 Volkswagen AG 110 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 Volkswagen i.e., Volkswagen and Pekin Life go up and down completely randomly.
Pair Corralation between Volkswagen and Pekin Life
Assuming the 90 days horizon Volkswagen AG 110 is expected to under-perform the Pekin Life. In addition to that, Volkswagen is 6.96 times more volatile than Pekin Life Insurance. It trades about -0.13 of its total potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.14 per unit of volatility. If you would invest 1,150 in Pekin Life Insurance on September 25, 2024 and sell it today you would earn a total of 25.00 from holding Pekin Life Insurance or generate 2.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Volkswagen AG 110 vs. Pekin Life Insurance
Performance |
Timeline |
Volkswagen AG 110 |
Pekin Life Insurance |
Volkswagen and Pekin Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Volkswagen and Pekin Life
The main advantage of trading using opposite Volkswagen and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen 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.Volkswagen vs. Porsche Automobile Holding | Volkswagen vs. Volkswagen AG | Volkswagen vs. Mercedes Benz Group AG | Volkswagen vs. Volkswagen AG Pref |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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