Correlation Between Agha Steel and Gul Ahmed
Can any of the company-specific risk be diversified away by investing in both Agha Steel and Gul Ahmed 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 Agha Steel and Gul Ahmed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agha Steel Industries and Gul Ahmed Textile, you can compare the effects of market volatilities on Agha Steel and Gul Ahmed 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 Agha Steel with a short position of Gul Ahmed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agha Steel and Gul Ahmed.
Diversification Opportunities for Agha Steel and Gul Ahmed
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agha and Gul is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Agha Steel Industries and Gul Ahmed Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gul Ahmed Textile and Agha Steel 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 Agha Steel Industries are associated (or correlated) with Gul Ahmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gul Ahmed Textile has no effect on the direction of Agha Steel i.e., Agha Steel and Gul Ahmed go up and down completely randomly.
Pair Corralation between Agha Steel and Gul Ahmed
Assuming the 90 days trading horizon Agha Steel is expected to generate 3.77 times less return on investment than Gul Ahmed. In addition to that, Agha Steel is 1.47 times more volatile than Gul Ahmed Textile. It trades about 0.01 of its total potential returns per unit of risk. Gul Ahmed Textile is currently generating about 0.06 per unit of volatility. If you would invest 1,778 in Gul Ahmed Textile on September 12, 2024 and sell it today you would earn a total of 693.00 from holding Gul Ahmed Textile or generate 38.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agha Steel Industries vs. Gul Ahmed Textile
Performance |
| Timeline |
| Agha Steel Industries |
| Gul Ahmed Textile |
Agha Steel and Gul Ahmed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agha Steel and Gul Ahmed
The main advantage of trading using opposite Agha Steel and Gul Ahmed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agha Steel position performs unexpectedly, Gul Ahmed 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 Gul Ahmed will offset losses from the drop in Gul Ahmed's long position.| Agha Steel vs. Habib Insurance | Agha Steel vs. Ghandhara Automobile | Agha Steel vs. Century Insurance | Agha Steel vs. Reliance Weaving Mills |
| Gul Ahmed vs. Agha Steel Industries | Gul Ahmed vs. Air Link Communication | Gul Ahmed vs. Beco Steel | Gul Ahmed vs. Amreli Steels |
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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