Correlation Between Aisha Steel and Organic Meat
Can any of the company-specific risk be diversified away by investing in both Aisha Steel and Organic Meat 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 Organic Meat 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 The Organic Meat, you can compare the effects of market volatilities on Aisha Steel and Organic Meat 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 Organic Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aisha Steel and Organic Meat.
Diversification Opportunities for Aisha Steel and Organic Meat
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aisha and Organic is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aisha Steel Mills and The Organic Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organic Meat 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 Organic Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organic Meat has no effect on the direction of Aisha Steel i.e., Aisha Steel and Organic Meat go up and down completely randomly.
Pair Corralation between Aisha Steel and Organic Meat
Assuming the 90 days trading horizon Aisha Steel Mills is expected to generate 2.12 times more return on investment than Organic Meat. However, Aisha Steel is 2.12 times more volatile than The Organic Meat. It trades about 0.22 of its potential returns per unit of risk. The Organic Meat is currently generating about -0.25 per unit of risk. If you would invest 641.00 in Aisha Steel Mills on August 30, 2024 and sell it today you would earn a total of 135.00 from holding Aisha Steel Mills or generate 21.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aisha Steel Mills vs. The Organic Meat
Performance |
| Timeline |
| Aisha Steel Mills |
| Organic Meat |
Aisha Steel and Organic Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aisha Steel and Organic Meat
The main advantage of trading using opposite Aisha Steel and Organic Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aisha Steel position performs unexpectedly, Organic Meat 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 Organic Meat will offset losses from the drop in Organic Meat's long position.| Aisha Steel vs. TPL Insurance | Aisha Steel vs. Silkbank | Aisha Steel vs. Adamjee Insurance | Aisha Steel vs. Agritech |
| Organic Meat vs. Bank of Punjab | Organic Meat vs. Wah Nobel Chemicals | Organic Meat vs. EFU General Insurance | Organic Meat vs. Silkbank |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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