Correlation Between Askari General and Premier Insurance
Can any of the company-specific risk be diversified away by investing in both Askari General and Premier 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 Premier 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 Premier Insurance, you can compare the effects of market volatilities on Askari General and Premier 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 Premier Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari General and Premier Insurance.
Diversification Opportunities for Askari General and Premier Insurance
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Askari and Premier is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Askari General Insurance and Premier Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier 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 Premier Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Insurance has no effect on the direction of Askari General i.e., Askari General and Premier Insurance go up and down completely randomly.
Pair Corralation between Askari General and Premier Insurance
Assuming the 90 days trading horizon Askari General Insurance is expected to generate 0.37 times more return on investment than Premier Insurance. However, Askari General Insurance is 2.68 times less risky than Premier Insurance. It trades about 0.16 of its potential returns per unit of risk. Premier Insurance is currently generating about -0.09 per unit of risk. If you would invest 2,331 in Askari General Insurance on August 28, 2024 and sell it today you would earn a total of 130.00 from holding Askari General Insurance or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Askari General Insurance vs. Premier Insurance
Performance |
| Timeline |
| Askari General Insurance |
| Premier Insurance |
Askari General and Premier Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari General and Premier Insurance
The main advantage of trading using opposite Askari General and Premier Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari General position performs unexpectedly, Premier 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 Premier Insurance will offset losses from the drop in Premier Insurance's long position.| Askari General vs. Lotte Chemical Pakistan | Askari General vs. Unilever Pakistan Foods | Askari General vs. Orient Rental Modaraba | Askari General vs. Packages |
| Premier Insurance vs. Adamjee Insurance | Premier Insurance vs. Unilever Pakistan Foods | Premier Insurance vs. United Insurance | Premier Insurance vs. Reliance Insurance Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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