Correlation Between Aisha Steel and Engro Polymer
Can any of the company-specific risk be diversified away by investing in both Aisha Steel and Engro Polymer 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 Aisha Steel and Engro Polymer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aisha Steel Mills and Engro Polymer Chemicals, you can compare the effects of market volatilities on Aisha Steel and Engro Polymer 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 Aisha Steel with a short position of Engro Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aisha Steel and Engro Polymer.
Diversification Opportunities for Aisha Steel and Engro Polymer
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aisha and Engro is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aisha Steel Mills and Engro Polymer Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engro Polymer Chemicals and Aisha Steel 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 Aisha Steel Mills are associated (or correlated) with Engro Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engro Polymer Chemicals has no effect on the direction of Aisha Steel i.e., Aisha Steel and Engro Polymer go up and down completely randomly.
Pair Corralation between Aisha Steel and Engro Polymer
Assuming the 90 days trading horizon Aisha Steel Mills is expected to under-perform the Engro Polymer. In addition to that, Aisha Steel is 2.45 times more volatile than Engro Polymer Chemicals. It trades about -0.27 of its total potential returns per unit of risk. Engro Polymer Chemicals is currently generating about -0.46 per unit of volatility. If you would invest 3,712 in Engro Polymer Chemicals on November 8, 2024 and sell it today you would lose (353.00) from holding Engro Polymer Chemicals or give up 9.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aisha Steel Mills vs. Engro Polymer Chemicals
Performance |
| Timeline |
| Aisha Steel Mills |
| Engro Polymer Chemicals |
Aisha Steel and Engro Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aisha Steel and Engro Polymer
The main advantage of trading using opposite Aisha Steel and Engro Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aisha Steel position performs unexpectedly, Engro Polymer 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 Engro Polymer will offset losses from the drop in Engro Polymer's long position.| Aisha Steel vs. Apna Microfinance Bank | Aisha Steel vs. Mandviwala Mausar Plastic | Aisha Steel vs. JS Bank | Aisha Steel vs. Habib Insurance |
| Engro Polymer vs. Agritech | Engro Polymer vs. IGI Life Insurance | Engro Polymer vs. Pakistan Telecommunication | Engro Polymer vs. Jubilee Life 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |