Correlation Between Aisha Steel and Murree Brewery
Can any of the company-specific risk be diversified away by investing in both Aisha Steel and Murree Brewery 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 Murree Brewery 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 Murree Brewery, you can compare the effects of market volatilities on Aisha Steel and Murree Brewery 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 Murree Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aisha Steel and Murree Brewery.
Diversification Opportunities for Aisha Steel and Murree Brewery
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aisha and Murree is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aisha Steel Mills and Murree Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murree Brewery 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 Murree Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murree Brewery has no effect on the direction of Aisha Steel i.e., Aisha Steel and Murree Brewery go up and down completely randomly.
Pair Corralation between Aisha Steel and Murree Brewery
Assuming the 90 days trading horizon Aisha Steel Mills is expected to under-perform the Murree Brewery. In addition to that, Aisha Steel is 2.11 times more volatile than Murree Brewery. It trades about -0.08 of its total potential returns per unit of risk. Murree Brewery is currently generating about 0.13 per unit of volatility. If you would invest 78,255 in Murree Brewery on November 5, 2024 and sell it today you would earn a total of 2,260 from holding Murree Brewery or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aisha Steel Mills vs. Murree Brewery
Performance |
| Timeline |
| Aisha Steel Mills |
| Murree Brewery |
Aisha Steel and Murree Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aisha Steel and Murree Brewery
The main advantage of trading using opposite Aisha Steel and Murree Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aisha Steel position performs unexpectedly, Murree Brewery 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 Murree Brewery will offset losses from the drop in Murree Brewery's long position.| Aisha Steel vs. Crescent Star Insurance | Aisha Steel vs. Sitara Chemical Industries | Aisha Steel vs. Century Insurance | Aisha Steel vs. Jubilee Life Insurance |
| Murree Brewery vs. Avanceon | Murree Brewery vs. EFU General Insurance | Murree Brewery vs. Universal Insurance | Murree Brewery vs. Agha Steel Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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