Correlation Between Askari Bank and NetSol Technologies
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By analyzing existing cross correlation between Askari Bank and NetSol Technologies, you can compare the effects of market volatilities on Askari Bank and NetSol Technologies 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 NetSol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari Bank and NetSol Technologies.
Diversification Opportunities for Askari Bank and NetSol Technologies
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Askari and NetSol is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Askari Bank and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies 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 NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of Askari Bank i.e., Askari Bank and NetSol Technologies go up and down completely randomly.
Pair Corralation between Askari Bank and NetSol Technologies
Assuming the 90 days trading horizon Askari Bank is expected to generate 1.7 times more return on investment than NetSol Technologies. However, Askari Bank is 1.7 times more volatile than NetSol Technologies. It trades about 0.51 of its potential returns per unit of risk. NetSol Technologies is currently generating about 0.28 per unit of risk. If you would invest 2,840 in Askari Bank on September 2, 2024 and sell it today you would earn a total of 1,142 from holding Askari Bank or generate 40.21% 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. NetSol Technologies
Performance |
| Timeline |
| Askari Bank |
| NetSol Technologies |
Askari Bank and NetSol Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari Bank and NetSol Technologies
The main advantage of trading using opposite Askari Bank and NetSol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari Bank position performs unexpectedly, NetSol Technologies 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 NetSol Technologies will offset losses from the drop in NetSol Technologies' long position.| Askari Bank vs. Oil and Gas | Askari Bank vs. Pakistan State Oil | Askari Bank vs. Pakistan Petroleum | Askari Bank vs. Fauji Fertilizer |
| NetSol Technologies vs. Masood Textile Mills | NetSol Technologies vs. Fauji Foods | NetSol Technologies vs. KSB Pumps | NetSol Technologies vs. Mari Petroleum |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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