Correlation Between Askari Bank and Crescent Star
Can any of the company-specific risk be diversified away by investing in both Askari Bank and Crescent Star 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 Crescent Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Askari Bank and Crescent Star Insurance, you can compare the effects of market volatilities on Askari Bank and Crescent Star 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 Crescent Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari Bank and Crescent Star.
Diversification Opportunities for Askari Bank and Crescent Star
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Askari and Crescent is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Askari Bank and Crescent Star Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Star Insurance 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 Crescent Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Star Insurance has no effect on the direction of Askari Bank i.e., Askari Bank and Crescent Star go up and down completely randomly.
Pair Corralation between Askari Bank and Crescent Star
Assuming the 90 days trading horizon Askari Bank is expected to generate 1.25 times less return on investment than Crescent Star. But when comparing it to its historical volatility, Askari Bank is 1.96 times less risky than Crescent Star. It trades about 0.1 of its potential returns per unit of risk. Crescent Star Insurance is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 136.00 in Crescent Star Insurance on August 24, 2024 and sell it today you would earn a total of 156.00 from holding Crescent Star Insurance or generate 114.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.5% |
| Values | Daily Returns |
Askari Bank vs. Crescent Star Insurance
Performance |
| Timeline |
| Askari Bank |
| Crescent Star Insurance |
Askari Bank and Crescent Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari Bank and Crescent Star
The main advantage of trading using opposite Askari Bank and Crescent Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari Bank position performs unexpectedly, Crescent Star 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 Crescent Star will offset losses from the drop in Crescent Star's long position.| Askari Bank vs. Habib Bank | Askari Bank vs. National Bank of | Askari Bank vs. MCB Bank | Askari Bank vs. Allied Bank |
| Crescent Star vs. Habib Bank | Crescent Star vs. National Bank of | Crescent Star vs. United Bank | Crescent Star vs. MCB Bank |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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