Correlation Between Askari Bank and East West
Can any of the company-specific risk be diversified away by investing in both Askari Bank and East West 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 East West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Askari Bank and East West Insurance, you can compare the effects of market volatilities on Askari Bank and East West 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 East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari Bank and East West.
Diversification Opportunities for Askari Bank and East West
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Askari and East is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Askari Bank and East West Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West 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 East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Insurance has no effect on the direction of Askari Bank i.e., Askari Bank and East West go up and down completely randomly.
Pair Corralation between Askari Bank and East West
Assuming the 90 days trading horizon Askari Bank is expected to generate 0.73 times more return on investment than East West. However, Askari Bank is 1.36 times less risky than East West. It trades about 0.1 of its potential returns per unit of risk. East West Insurance is currently generating about -0.14 per unit of risk. If you would invest 1,377 in Askari Bank on August 24, 2024 and sell it today you would earn a total of 1,742 from holding Askari Bank or generate 126.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 12.47% |
| Values | Daily Returns |
Askari Bank vs. East West Insurance
Performance |
| Timeline |
| Askari Bank |
| East West Insurance |
Askari Bank and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari Bank and East West
The main advantage of trading using opposite Askari Bank and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari Bank position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.| Askari Bank vs. Habib Bank | Askari Bank vs. National Bank of | Askari Bank vs. MCB Bank | Askari Bank vs. Allied Bank |
| East West vs. Habib Insurance | East West vs. Ghandhara Automobile | East West vs. Century Insurance | East West vs. Reliance Weaving Mills |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |