Correlation Between Askari Bank and Attock Petroleum
Can any of the company-specific risk be diversified away by investing in both Askari Bank and Attock Petroleum 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 Bank and Attock Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Askari Bank and Attock Petroleum, you can compare the effects of market volatilities on Askari Bank and Attock Petroleum 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 Bank with a short position of Attock Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari Bank and Attock Petroleum.
Diversification Opportunities for Askari Bank and Attock Petroleum
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Askari and Attock is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Askari Bank and Attock Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Attock Petroleum and Askari Bank 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 Bank are associated (or correlated) with Attock Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Attock Petroleum has no effect on the direction of Askari Bank i.e., Askari Bank and Attock Petroleum go up and down completely randomly.
Pair Corralation between Askari Bank and Attock Petroleum
Assuming the 90 days trading horizon Askari Bank is expected to generate 2.28 times more return on investment than Attock Petroleum. However, Askari Bank is 2.28 times more volatile than Attock Petroleum. It trades about 0.04 of its potential returns per unit of risk. Attock Petroleum is currently generating about -0.09 per unit of risk. If you would invest 4,007 in Askari Bank on November 28, 2024 and sell it today you would earn a total of 65.00 from holding Askari Bank or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Askari Bank vs. Attock Petroleum
Performance |
| Timeline |
| Askari Bank |
| Attock Petroleum |
Askari Bank and Attock Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari Bank and Attock Petroleum
The main advantage of trading using opposite Askari Bank and Attock Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari Bank position performs unexpectedly, Attock Petroleum 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 Attock Petroleum will offset losses from the drop in Attock Petroleum's long position.| Askari Bank vs. Oil and Gas | Askari Bank vs. 786 Investment Limited | Askari Bank vs. Big Bird Foods | Askari Bank vs. Sitara Chemical Industries |
| Attock Petroleum vs. Matco Foods | Attock Petroleum vs. National Foods | Attock Petroleum vs. The Organic Meat | Attock Petroleum vs. Pak Datacom |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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