Correlation Between AKD Hospitality and Al Shaheer
Can any of the company-specific risk be diversified away by investing in both AKD Hospitality and Al Shaheer 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 AKD Hospitality and Al Shaheer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKD Hospitality and Al Shaheer, you can compare the effects of market volatilities on AKD Hospitality and Al Shaheer 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 AKD Hospitality with a short position of Al Shaheer. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKD Hospitality and Al Shaheer.
Diversification Opportunities for AKD Hospitality and Al Shaheer
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AKD and ASC is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding AKD Hospitality and Al Shaheer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Shaheer and AKD Hospitality 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 AKD Hospitality are associated (or correlated) with Al Shaheer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Shaheer has no effect on the direction of AKD Hospitality i.e., AKD Hospitality and Al Shaheer go up and down completely randomly.
Pair Corralation between AKD Hospitality and Al Shaheer
Assuming the 90 days trading horizon AKD Hospitality is expected to generate 1.14 times more return on investment than Al Shaheer. However, AKD Hospitality is 1.14 times more volatile than Al Shaheer. It trades about 0.05 of its potential returns per unit of risk. Al Shaheer is currently generating about 0.0 per unit of risk. If you would invest 10,494 in AKD Hospitality on September 2, 2024 and sell it today you would earn a total of 3,606 from holding AKD Hospitality or generate 34.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.87% |
| Values | Daily Returns |
AKD Hospitality vs. Al Shaheer
Performance |
| Timeline |
| AKD Hospitality |
| Al Shaheer |
AKD Hospitality and Al Shaheer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKD Hospitality and Al Shaheer
The main advantage of trading using opposite AKD Hospitality and Al Shaheer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKD Hospitality position performs unexpectedly, Al Shaheer 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 Al Shaheer will offset losses from the drop in Al Shaheer's long position.| AKD Hospitality vs. Habib Insurance | AKD Hospitality vs. Century Insurance | AKD Hospitality vs. Reliance Weaving Mills | AKD Hospitality vs. Media Times |
| Al Shaheer vs. Crescent Star Insurance | Al Shaheer vs. Shaheen Insurance | Al Shaheer vs. Matco Foods | Al Shaheer vs. Pakistan Telecommunication |
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.
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