Correlation Between Askari General and K Electric
Can any of the company-specific risk be diversified away by investing in both Askari General and K Electric 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 K Electric 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 K Electric, you can compare the effects of market volatilities on Askari General and K Electric 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 K Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari General and K Electric.
Diversification Opportunities for Askari General and K Electric
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Askari and KEL is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Askari General Insurance and K Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Electric 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 K Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Electric has no effect on the direction of Askari General i.e., Askari General and K Electric go up and down completely randomly.
Pair Corralation between Askari General and K Electric
Assuming the 90 days trading horizon Askari General Insurance is expected to generate 1.01 times more return on investment than K Electric. However, Askari General is 1.01 times more volatile than K Electric. It trades about 0.11 of its potential returns per unit of risk. K Electric is currently generating about -0.33 per unit of risk. If you would invest 2,929 in Askari General Insurance on November 3, 2024 and sell it today you would earn a total of 146.00 from holding Askari General Insurance or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Askari General Insurance vs. K Electric
Performance |
| Timeline |
| Askari General Insurance |
| K Electric |
Askari General and K Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari General and K Electric
The main advantage of trading using opposite Askari General and K Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari General position performs unexpectedly, K Electric 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 K Electric will offset losses from the drop in K Electric's long position.| Askari General vs. National Foods | Askari General vs. Fauji Foods | Askari General vs. Fateh Sports Wear | Askari General vs. Pakistan Tobacco |
| K Electric vs. Supernet Technologie | K Electric vs. Jubilee Life Insurance | K Electric vs. AKD Hospitality | K Electric vs. Habib 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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