Correlation Between Askari Bank and Ghandhara Automobile
Can any of the company-specific risk be diversified away by investing in both Askari Bank and Ghandhara Automobile 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 Ghandhara Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Askari Bank and Ghandhara Automobile, you can compare the effects of market volatilities on Askari Bank and Ghandhara Automobile 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 Ghandhara Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari Bank and Ghandhara Automobile.
Diversification Opportunities for Askari Bank and Ghandhara Automobile
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Askari and Ghandhara is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Askari Bank and Ghandhara Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ghandhara Automobile 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 Ghandhara Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ghandhara Automobile has no effect on the direction of Askari Bank i.e., Askari Bank and Ghandhara Automobile go up and down completely randomly.
Pair Corralation between Askari Bank and Ghandhara Automobile
Assuming the 90 days trading horizon Askari Bank is expected to generate 2.85 times less return on investment than Ghandhara Automobile. But when comparing it to its historical volatility, Askari Bank is 1.57 times less risky than Ghandhara Automobile. It trades about 0.11 of its potential returns per unit of risk. Ghandhara Automobile is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,543 in Ghandhara Automobile on November 2, 2024 and sell it today you would earn a total of 40,261 from holding Ghandhara Automobile or generate 615.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Askari Bank vs. Ghandhara Automobile
Performance |
| Timeline |
| Askari Bank |
| Ghandhara Automobile |
Askari Bank and Ghandhara Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari Bank and Ghandhara Automobile
The main advantage of trading using opposite Askari Bank and Ghandhara Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari Bank position performs unexpectedly, Ghandhara Automobile 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 Ghandhara Automobile will offset losses from the drop in Ghandhara Automobile's long position.| Askari Bank vs. Packages | Askari Bank vs. Oil and Gas | Askari Bank vs. Jubilee Life Insurance | Askari Bank vs. Avanceon |
| Ghandhara Automobile vs. Air Link Communication | Ghandhara Automobile vs. Pakistan Telecommunication | Ghandhara Automobile vs. Nimir Industrial Chemical | Ghandhara Automobile vs. Wah Nobel Chemicals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |