Correlation Between Askari General and Arif Habib
Can any of the company-specific risk be diversified away by investing in both Askari General and Arif Habib 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 Askari General and Arif Habib into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Askari General Insurance and Arif Habib, you can compare the effects of market volatilities on Askari General and Arif Habib 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 Askari General with a short position of Arif Habib. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari General and Arif Habib.
Diversification Opportunities for Askari General and Arif Habib
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Askari and Arif is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Askari General Insurance and Arif Habib in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arif Habib and Askari General 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 Askari General Insurance are associated (or correlated) with Arif Habib. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arif Habib has no effect on the direction of Askari General i.e., Askari General and Arif Habib go up and down completely randomly.
Pair Corralation between Askari General and Arif Habib
Assuming the 90 days trading horizon Askari General is expected to generate 5.85 times less return on investment than Arif Habib. But when comparing it to its historical volatility, Askari General Insurance is 2.11 times less risky than Arif Habib. It trades about 0.14 of its potential returns per unit of risk. Arif Habib is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 6,751 in Arif Habib on November 28, 2024 and sell it today you would earn a total of 2,365 from holding Arif Habib or generate 35.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Askari General Insurance vs. Arif Habib
Performance |
| Timeline |
| Askari General Insurance |
| Arif Habib |
Askari General and Arif Habib Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari General and Arif Habib
The main advantage of trading using opposite Askari General and Arif Habib positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari General position performs unexpectedly, Arif Habib 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 Arif Habib will offset losses from the drop in Arif Habib's long position.| Askari General vs. Jubilee Life Insurance | Askari General vs. Allied Bank | Askari General vs. Habib Insurance | Askari General vs. Atlas Insurance |
| Arif Habib vs. Agritech | Arif Habib vs. Unilever Pakistan Foods | Arif Habib vs. The Organic Meat | Arif Habib vs. TPL Insurance |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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