Correlation Between Askari Bank and Engro
Can any of the company-specific risk be diversified away by investing in both Askari Bank and Engro 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 Engro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Askari Bank and Engro, you can compare the effects of market volatilities on Askari Bank and Engro 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 Engro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari Bank and Engro.
Diversification Opportunities for Askari Bank and Engro
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Askari and Engro is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Askari Bank and Engro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engro 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 Engro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engro has no effect on the direction of Askari Bank i.e., Askari Bank and Engro go up and down completely randomly.
Pair Corralation between Askari Bank and Engro
Assuming the 90 days trading horizon Askari Bank is expected to generate 1.96 times more return on investment than Engro. However, Askari Bank is 1.96 times more volatile than Engro. It trades about 0.19 of its potential returns per unit of risk. Engro is currently generating about 0.04 per unit of risk. If you would invest 2,165 in Askari Bank on August 31, 2024 and sell it today you would earn a total of 1,817 from holding Askari Bank or generate 83.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Askari Bank vs. Engro
Performance |
| Timeline |
| Askari Bank |
| Engro |
Askari Bank and Engro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari Bank and Engro
The main advantage of trading using opposite Askari Bank and Engro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari Bank position performs unexpectedly, Engro 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 Engro will offset losses from the drop in Engro's long position.| Askari Bank vs. Oil and Gas | Askari Bank vs. Pakistan State Oil | Askari Bank vs. Pakistan Petroleum | Askari Bank vs. Fauji Fertilizer |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |