Correlation Between Air Link and Gul Ahmed
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By analyzing existing cross correlation between Air Link Communication and Gul Ahmed Textile, you can compare the effects of market volatilities on Air Link and Gul Ahmed 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 Gul Ahmed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Link and Gul Ahmed.
Diversification Opportunities for Air Link and Gul Ahmed
Poor diversification
The 3 months correlation between Air and Gul is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Air Link Communication and Gul Ahmed Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gul Ahmed Textile 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 Gul Ahmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gul Ahmed Textile has no effect on the direction of Air Link i.e., Air Link and Gul Ahmed go up and down completely randomly.
Pair Corralation between Air Link and Gul Ahmed
Assuming the 90 days trading horizon Air Link Communication is expected to generate 1.5 times more return on investment than Gul Ahmed. However, Air Link is 1.5 times more volatile than Gul Ahmed Textile. It trades about 0.14 of its potential returns per unit of risk. Gul Ahmed Textile is currently generating about 0.04 per unit of risk. If you would invest 2,241 in Air Link Communication on September 12, 2024 and sell it today you would earn a total of 15,566 from holding Air Link Communication or generate 694.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Link Communication vs. Gul Ahmed Textile
Performance |
| Timeline |
| Air Link Communication |
| Gul Ahmed Textile |
Air Link and Gul Ahmed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Link and Gul Ahmed
The main advantage of trading using opposite Air Link and Gul Ahmed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Link position performs unexpectedly, Gul Ahmed 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 Gul Ahmed will offset losses from the drop in Gul Ahmed's long position.| Air Link vs. Habib Insurance | Air Link vs. Ghandhara Automobile | Air Link vs. Century Insurance | Air Link vs. Reliance Weaving Mills |
| Gul Ahmed vs. Agha Steel Industries | Gul Ahmed vs. Air Link Communication | Gul Ahmed vs. Beco Steel | Gul Ahmed vs. Amreli Steels |
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.
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