Correlation Between Askari Bank and Kohinoor Industries
Can any of the company-specific risk be diversified away by investing in both Askari Bank and Kohinoor Industries 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 Kohinoor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Askari Bank and Kohinoor Industries, you can compare the effects of market volatilities on Askari Bank and Kohinoor Industries 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 Kohinoor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari Bank and Kohinoor Industries.
Diversification Opportunities for Askari Bank and Kohinoor Industries
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Askari and Kohinoor is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Askari Bank and Kohinoor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kohinoor Industries 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 Kohinoor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kohinoor Industries has no effect on the direction of Askari Bank i.e., Askari Bank and Kohinoor Industries go up and down completely randomly.
Pair Corralation between Askari Bank and Kohinoor Industries
Assuming the 90 days trading horizon Askari Bank is expected to generate 0.97 times more return on investment than Kohinoor Industries. However, Askari Bank is 1.03 times less risky than Kohinoor Industries. It trades about 0.52 of its potential returns per unit of risk. Kohinoor Industries is currently generating about 0.03 per unit of risk. If you would invest 2,804 in Askari Bank on September 4, 2024 and sell it today you would earn a total of 1,150 from holding Askari Bank or generate 41.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Askari Bank vs. Kohinoor Industries
Performance |
| Timeline |
| Askari Bank |
| Kohinoor Industries |
Askari Bank and Kohinoor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari Bank and Kohinoor Industries
The main advantage of trading using opposite Askari Bank and Kohinoor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari Bank position performs unexpectedly, Kohinoor Industries 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 Kohinoor Industries will offset losses from the drop in Kohinoor Industries' long position.| Askari Bank vs. Masood Textile Mills | Askari Bank vs. Fauji Foods | Askari Bank vs. KSB Pumps | Askari Bank vs. Mari Petroleum |
| Kohinoor Industries vs. Pakistan Telecommunication | Kohinoor Industries vs. Century Insurance | Kohinoor Industries vs. Avanceon | Kohinoor Industries vs. Big Bird Foods |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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