Correlation Between Askari General and Habib Insurance
Can any of the company-specific risk be diversified away by investing in both Askari General and Habib 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 Habib 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 Habib Insurance, you can compare the effects of market volatilities on Askari General and Habib 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 Habib Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari General and Habib Insurance.
Diversification Opportunities for Askari General and Habib Insurance
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Askari and Habib is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Askari General Insurance and Habib Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib 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 Habib Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Insurance has no effect on the direction of Askari General i.e., Askari General and Habib Insurance go up and down completely randomly.
Pair Corralation between Askari General and Habib Insurance
Assuming the 90 days trading horizon Askari General Insurance is expected to generate 0.6 times more return on investment than Habib Insurance. However, Askari General Insurance is 1.66 times less risky than Habib Insurance. It trades about 0.12 of its potential returns per unit of risk. Habib Insurance is currently generating about 0.05 per unit of risk. If you would invest 1,435 in Askari General Insurance on September 4, 2024 and sell it today you would earn a total of 1,151 from holding Askari General Insurance or generate 80.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.05% |
| Values | Daily Returns |
Askari General Insurance vs. Habib Insurance
Performance |
| Timeline |
| Askari General Insurance |
| Habib Insurance |
Askari General and Habib Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari General and Habib Insurance
The main advantage of trading using opposite Askari General and Habib Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari General position performs unexpectedly, Habib 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 Habib Insurance will offset losses from the drop in Habib Insurance's long position.| Askari General vs. Oil and Gas | Askari General vs. Pakistan State Oil | Askari General vs. Pakistan Petroleum | Askari General vs. Fauji Fertilizer |
| Habib Insurance vs. Pakistan Telecommunication | Habib Insurance vs. National Foods | Habib Insurance vs. Air Link Communication | Habib Insurance vs. Quice Food Industries |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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