Correlation Between Arif Habib and Metropolitan Steel
Can any of the company-specific risk be diversified away by investing in both Arif Habib and Metropolitan Steel 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 Arif Habib and Metropolitan Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arif Habib and Metropolitan Steel Corp, you can compare the effects of market volatilities on Arif Habib and Metropolitan Steel 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 Arif Habib with a short position of Metropolitan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arif Habib and Metropolitan Steel.
Diversification Opportunities for Arif Habib and Metropolitan Steel
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arif and Metropolitan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Arif Habib and Metropolitan Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Steel Corp and Arif Habib 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 Arif Habib are associated (or correlated) with Metropolitan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Steel Corp has no effect on the direction of Arif Habib i.e., Arif Habib and Metropolitan Steel go up and down completely randomly.
Pair Corralation between Arif Habib and Metropolitan Steel
Assuming the 90 days trading horizon Arif Habib is expected to generate 1.22 times more return on investment than Metropolitan Steel. However, Arif Habib is 1.22 times more volatile than Metropolitan Steel Corp. It trades about 0.2 of its potential returns per unit of risk. Metropolitan Steel Corp is currently generating about 0.14 per unit of risk. If you would invest 6,100 in Arif Habib on September 4, 2024 and sell it today you would earn a total of 933.00 from holding Arif Habib or generate 15.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Arif Habib vs. Metropolitan Steel Corp
Performance |
| Timeline |
| Arif Habib |
| Metropolitan Steel Corp |
Arif Habib and Metropolitan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arif Habib and Metropolitan Steel
The main advantage of trading using opposite Arif Habib and Metropolitan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arif Habib position performs unexpectedly, Metropolitan Steel 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 Metropolitan Steel will offset losses from the drop in Metropolitan Steel's long position.| Arif Habib vs. Metropolitan Steel Corp | Arif Habib vs. Beco Steel | Arif Habib vs. Pakistan Telecommunication | Arif Habib vs. Data Agro |
| Metropolitan Steel vs. Masood Textile Mills | Metropolitan Steel vs. Fauji Foods | Metropolitan Steel vs. KSB Pumps | Metropolitan Steel 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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