Correlation Between Askari Bank and Organic Meat
Can any of the company-specific risk be diversified away by investing in both Askari Bank and Organic Meat 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 Organic Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Askari Bank and The Organic Meat, you can compare the effects of market volatilities on Askari Bank and Organic Meat 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 Organic Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Askari Bank and Organic Meat.
Diversification Opportunities for Askari Bank and Organic Meat
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Askari and Organic is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Askari Bank and The Organic Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organic Meat 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 Organic Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organic Meat has no effect on the direction of Askari Bank i.e., Askari Bank and Organic Meat go up and down completely randomly.
Pair Corralation between Askari Bank and Organic Meat
Assuming the 90 days trading horizon Askari Bank is expected to generate 0.8 times more return on investment than Organic Meat. However, Askari Bank is 1.25 times less risky than Organic Meat. It trades about 0.12 of its potential returns per unit of risk. The Organic Meat is currently generating about 0.06 per unit of risk. If you would invest 1,351 in Askari Bank on August 31, 2024 and sell it today you would earn a total of 2,279 from holding Askari Bank or generate 168.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Askari Bank vs. The Organic Meat
Performance |
| Timeline |
| Askari Bank |
| Organic Meat |
Askari Bank and Organic Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Askari Bank and Organic Meat
The main advantage of trading using opposite Askari Bank and Organic Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Askari Bank position performs unexpectedly, Organic Meat 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 Organic Meat will offset losses from the drop in Organic Meat'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 |
| Organic Meat vs. Reliance Insurance Co | Organic Meat vs. Habib Insurance | Organic Meat vs. Meezan Bank | Organic Meat vs. Askari Bank |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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