Correlation Between Askari General and Matco Foods
Can any of the company-specific risk be diversified away by investing in both Askari General and Matco Foods 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 Matco Foods 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 Matco Foods, you can compare the effects of market volatilities on Askari General and Matco Foods 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 Matco Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari General and Matco Foods.
Diversification Opportunities for Askari General and Matco Foods
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Askari and Matco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Askari General Insurance and Matco Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matco Foods 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 Matco Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matco Foods has no effect on the direction of Askari General i.e., Askari General and Matco Foods go up and down completely randomly.
Pair Corralation between Askari General and Matco Foods
Assuming the 90 days trading horizon Askari General Insurance is expected to generate 0.62 times more return on investment than Matco Foods. However, Askari General Insurance is 1.61 times less risky than Matco Foods. It trades about 0.23 of its potential returns per unit of risk. Matco Foods is currently generating about 0.07 per unit of risk. If you would invest 2,655 in Askari General Insurance on October 20, 2024 and sell it today you would earn a total of 344.00 from holding Askari General Insurance or generate 12.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Askari General Insurance vs. Matco Foods
Performance |
| Timeline |
| Askari General Insurance |
| Matco Foods |
Askari General and Matco Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari General and Matco Foods
The main advantage of trading using opposite Askari General and Matco Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari General position performs unexpectedly, Matco Foods 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 Matco Foods will offset losses from the drop in Matco Foods' long position.| Askari General vs. United Insurance | Askari General vs. Nimir Industrial Chemical | Askari General vs. Pakistan Telecommunication | Askari General vs. Ghandhara Automobile |
| Matco Foods vs. Masood Textile Mills | Matco Foods vs. Fauji Foods | Matco Foods vs. KSB Pumps | Matco Foods vs. Mari Petroleum |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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