Correlation Between Askari General and Atlas Insurance
Can any of the company-specific risk be diversified away by investing in both Askari General and Atlas Insurance 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 Atlas Insurance 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 Atlas Insurance, you can compare the effects of market volatilities on Askari General and Atlas Insurance 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 Atlas Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari General and Atlas Insurance.
Diversification Opportunities for Askari General and Atlas Insurance
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Askari and Atlas is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Askari General Insurance and Atlas Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Insurance 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 Atlas Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Insurance has no effect on the direction of Askari General i.e., Askari General and Atlas Insurance go up and down completely randomly.
Pair Corralation between Askari General and Atlas Insurance
Assuming the 90 days trading horizon Askari General Insurance is expected to generate 1.48 times more return on investment than Atlas Insurance. However, Askari General is 1.48 times more volatile than Atlas Insurance. It trades about 0.14 of its potential returns per unit of risk. Atlas Insurance is currently generating about 0.14 per unit of risk. If you would invest 2,450 in Askari General Insurance on November 8, 2024 and sell it today you would earn a total of 591.00 from holding Askari General Insurance or generate 24.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Askari General Insurance vs. Atlas Insurance
Performance |
| Timeline |
| Askari General Insurance |
| Atlas Insurance |
Askari General and Atlas Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari General and Atlas Insurance
The main advantage of trading using opposite Askari General and Atlas Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari General position performs unexpectedly, Atlas Insurance 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 Atlas Insurance will offset losses from the drop in Atlas Insurance's long position.| Askari General vs. Bank of Punjab | Askari General vs. Pakistan Telecommunication | Askari General vs. Air Link Communication | Askari General vs. Allied Bank |
| Atlas Insurance vs. Honda Atlas Cars | Atlas Insurance vs. Shifa International Hospitals | Atlas Insurance vs. JS Investments | Atlas Insurance vs. Universal 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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