Correlation Between Adamjee Insurance and Roshan Packages
Can any of the company-specific risk be diversified away by investing in both Adamjee Insurance and Roshan Packages 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 Adamjee Insurance and Roshan Packages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adamjee Insurance and Roshan Packages, you can compare the effects of market volatilities on Adamjee Insurance and Roshan Packages 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 Adamjee Insurance with a short position of Roshan Packages. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adamjee Insurance and Roshan Packages.
Diversification Opportunities for Adamjee Insurance and Roshan Packages
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adamjee and Roshan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Adamjee Insurance and Roshan Packages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roshan Packages and Adamjee Insurance 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 Adamjee Insurance are associated (or correlated) with Roshan Packages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roshan Packages has no effect on the direction of Adamjee Insurance i.e., Adamjee Insurance and Roshan Packages go up and down completely randomly.
Pair Corralation between Adamjee Insurance and Roshan Packages
Assuming the 90 days trading horizon Adamjee Insurance is expected to generate 2.48 times less return on investment than Roshan Packages. But when comparing it to its historical volatility, Adamjee Insurance is 1.45 times less risky than Roshan Packages. It trades about 0.09 of its potential returns per unit of risk. Roshan Packages is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,576 in Roshan Packages on September 3, 2024 and sell it today you would earn a total of 163.00 from holding Roshan Packages or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adamjee Insurance vs. Roshan Packages
Performance |
| Timeline |
| Adamjee Insurance |
| Roshan Packages |
Adamjee Insurance and Roshan Packages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adamjee Insurance and Roshan Packages
The main advantage of trading using opposite Adamjee Insurance and Roshan Packages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adamjee Insurance position performs unexpectedly, Roshan Packages 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 Roshan Packages will offset losses from the drop in Roshan Packages' long position.| Adamjee Insurance vs. Oil and Gas | Adamjee Insurance vs. Pakistan State Oil | Adamjee Insurance vs. Pakistan Petroleum | Adamjee Insurance vs. Fauji Fertilizer |
| Roshan Packages vs. Masood Textile Mills | Roshan Packages vs. Fauji Foods | Roshan Packages vs. KSB Pumps | Roshan Packages 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
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets |