Correlation Between Aisha Steel and Invest Capital
Can any of the company-specific risk be diversified away by investing in both Aisha Steel and Invest Capital 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 Invest Capital 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 Invest Capital Investment, you can compare the effects of market volatilities on Aisha Steel and Invest Capital 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 Invest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aisha Steel and Invest Capital.
Diversification Opportunities for Aisha Steel and Invest Capital
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aisha and Invest is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aisha Steel Mills and Invest Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invest Capital Investment 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 Invest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invest Capital Investment has no effect on the direction of Aisha Steel i.e., Aisha Steel and Invest Capital go up and down completely randomly.
Pair Corralation between Aisha Steel and Invest Capital
Assuming the 90 days trading horizon Aisha Steel Mills is expected to generate 0.9 times more return on investment than Invest Capital. However, Aisha Steel Mills is 1.11 times less risky than Invest Capital. It trades about -0.08 of its potential returns per unit of risk. Invest Capital Investment is currently generating about -0.13 per unit of risk. If you would invest 1,174 in Aisha Steel Mills on November 5, 2024 and sell it today you would lose (49.00) from holding Aisha Steel Mills or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aisha Steel Mills vs. Invest Capital Investment
Performance |
| Timeline |
| Aisha Steel Mills |
| Invest Capital Investment |
Aisha Steel and Invest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aisha Steel and Invest Capital
The main advantage of trading using opposite Aisha Steel and Invest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aisha Steel position performs unexpectedly, Invest Capital 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 Invest Capital will offset losses from the drop in Invest Capital's long position.| Aisha Steel vs. Roshan Packages | Aisha Steel vs. Air Link Communication | Aisha Steel vs. Matco Foods | Aisha Steel vs. Packages |
| Invest Capital vs. Pak Datacom | Invest Capital vs. Pakistan Telecommunication | Invest Capital vs. Air Link Communication | Invest Capital vs. National Foods |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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