Correlation Between Askari General and Nimir Industrial
Can any of the company-specific risk be diversified away by investing in both Askari General and Nimir Industrial 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 Nimir Industrial 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 Nimir Industrial Chemical, you can compare the effects of market volatilities on Askari General and Nimir Industrial 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 Nimir Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari General and Nimir Industrial.
Diversification Opportunities for Askari General and Nimir Industrial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Askari and Nimir is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Askari General Insurance and Nimir Industrial Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nimir Industrial Chemical 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 Nimir Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nimir Industrial Chemical has no effect on the direction of Askari General i.e., Askari General and Nimir Industrial go up and down completely randomly.
Pair Corralation between Askari General and Nimir Industrial
Assuming the 90 days trading horizon Askari General Insurance is expected to generate 1.0 times more return on investment than Nimir Industrial. However, Askari General Insurance is 1.0 times less risky than Nimir Industrial. It trades about 0.12 of its potential returns per unit of risk. Nimir Industrial Chemical 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 | Significant |
| Accuracy | 97.29% |
| Values | Daily Returns |
Askari General Insurance vs. Nimir Industrial Chemical
Performance |
| Timeline |
| Askari General Insurance |
| Nimir Industrial Chemical |
Askari General and Nimir Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari General and Nimir Industrial
The main advantage of trading using opposite Askari General and Nimir Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari General position performs unexpectedly, Nimir Industrial 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 Nimir Industrial will offset losses from the drop in Nimir Industrial'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 |
| Nimir Industrial vs. Masood Textile Mills | Nimir Industrial vs. Fauji Foods | Nimir Industrial vs. KSB Pumps | Nimir Industrial 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |