Correlation Between Apna Microfinance and AKD Hospitality
Can any of the company-specific risk be diversified away by investing in both Apna Microfinance and AKD Hospitality 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 Apna Microfinance and AKD Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apna Microfinance Bank and AKD Hospitality, you can compare the effects of market volatilities on Apna Microfinance and AKD Hospitality 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 Apna Microfinance with a short position of AKD Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apna Microfinance and AKD Hospitality.
Diversification Opportunities for Apna Microfinance and AKD Hospitality
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Apna and AKD is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Apna Microfinance Bank and AKD Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKD Hospitality and Apna Microfinance 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 Apna Microfinance Bank are associated (or correlated) with AKD Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKD Hospitality has no effect on the direction of Apna Microfinance i.e., Apna Microfinance and AKD Hospitality go up and down completely randomly.
Pair Corralation between Apna Microfinance and AKD Hospitality
Assuming the 90 days trading horizon Apna Microfinance Bank is expected to generate 1.01 times more return on investment than AKD Hospitality. However, Apna Microfinance is 1.01 times more volatile than AKD Hospitality. It trades about 0.29 of its potential returns per unit of risk. AKD Hospitality is currently generating about 0.08 per unit of risk. If you would invest 1,001 in Apna Microfinance Bank on November 7, 2024 and sell it today you would earn a total of 196.00 from holding Apna Microfinance Bank or generate 19.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Apna Microfinance Bank vs. AKD Hospitality
Performance |
| Timeline |
| Apna Microfinance Bank |
| AKD Hospitality |
Apna Microfinance and AKD Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apna Microfinance and AKD Hospitality
The main advantage of trading using opposite Apna Microfinance and AKD Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apna Microfinance position performs unexpectedly, AKD Hospitality 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 AKD Hospitality will offset losses from the drop in AKD Hospitality's long position.| Apna Microfinance vs. Pakistan Reinsurance | Apna Microfinance vs. Nimir Industrial Chemical | Apna Microfinance vs. Data Agro | Apna Microfinance vs. United Insurance |
| AKD Hospitality vs. Habib Insurance | AKD Hospitality vs. Ghandhara Automobile | AKD Hospitality vs. Shadab Textile Mills | AKD Hospitality vs. Century Insurance |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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