Correlation Between Air Link and Fauji Foods
Specify exactly 2 symbols:
By analyzing existing cross correlation between Air Link Communication and Fauji Foods, you can compare the effects of market volatilities on Air Link and Fauji Foods 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 Air Link with a short position of Fauji Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Link and Fauji Foods.
Diversification Opportunities for Air Link and Fauji Foods
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Fauji is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Air Link Communication and Fauji Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fauji Foods and Air Link 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 Air Link Communication are associated (or correlated) with Fauji Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fauji Foods has no effect on the direction of Air Link i.e., Air Link and Fauji Foods go up and down completely randomly.
Pair Corralation between Air Link and Fauji Foods
Assuming the 90 days trading horizon Air Link is expected to generate 6.17 times less return on investment than Fauji Foods. But when comparing it to its historical volatility, Air Link Communication is 1.24 times less risky than Fauji Foods. It trades about 0.07 of its potential returns per unit of risk. Fauji Foods is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,317 in Fauji Foods on October 21, 2024 and sell it today you would earn a total of 404.00 from holding Fauji Foods or generate 30.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Link Communication vs. Fauji Foods
Performance |
| Timeline |
| Air Link Communication |
| Fauji Foods |
Air Link and Fauji Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Link and Fauji Foods
The main advantage of trading using opposite Air Link and Fauji Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Link position performs unexpectedly, Fauji Foods 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 Fauji Foods will offset losses from the drop in Fauji Foods' long position.| Air Link vs. Attock Petroleum | Air Link vs. WorldCall Telecom | Air Link vs. Engro Polymer Chemicals | Air Link vs. AGP |
| Fauji Foods vs. Habib Insurance | Fauji Foods vs. Pakistan Telecommunication | Fauji Foods vs. Air Link Communication | Fauji Foods vs. United Insurance |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |