Correlation Between Askari General and Organic Meat
Can any of the company-specific risk be diversified away by investing in both Askari General and Organic Meat 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 Organic Meat 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 The Organic Meat, you can compare the effects of market volatilities on Askari General and Organic Meat 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 Organic Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari General and Organic Meat.
Diversification Opportunities for Askari General and Organic Meat
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Askari and Organic is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Askari General Insurance and The Organic Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organic Meat 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 Organic Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organic Meat has no effect on the direction of Askari General i.e., Askari General and Organic Meat go up and down completely randomly.
Pair Corralation between Askari General and Organic Meat
Assuming the 90 days trading horizon Askari General Insurance is expected to generate 0.67 times more return on investment than Organic Meat. However, Askari General Insurance is 1.5 times less risky than Organic Meat. It trades about 0.16 of its potential returns per unit of risk. The Organic Meat is currently generating about -0.14 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Askari General Insurance vs. The Organic Meat
Performance |
| Timeline |
| Askari General Insurance |
| Organic Meat |
Askari General and Organic Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari General and Organic Meat
The main advantage of trading using opposite Askari General and Organic Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari General position performs unexpectedly, Organic Meat 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 Organic Meat will offset losses from the drop in Organic Meat'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 |
| Organic Meat vs. Habib Insurance | Organic Meat vs. Century Insurance | Organic Meat vs. Reliance Weaving Mills | Organic Meat vs. Media Times |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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