Correlation Between Amreli Steels and National Bank
Can any of the company-specific risk be diversified away by investing in both Amreli Steels and National Bank 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 Amreli Steels and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amreli Steels and National Bank of, you can compare the effects of market volatilities on Amreli Steels and National Bank 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 Amreli Steels with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amreli Steels and National Bank.
Diversification Opportunities for Amreli Steels and National Bank
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amreli and National is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Amreli Steels and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Amreli Steels 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 Amreli Steels are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Amreli Steels i.e., Amreli Steels and National Bank go up and down completely randomly.
Pair Corralation between Amreli Steels and National Bank
Assuming the 90 days trading horizon Amreli Steels is expected to generate 0.75 times more return on investment than National Bank. However, Amreli Steels is 1.33 times less risky than National Bank. It trades about 0.19 of its potential returns per unit of risk. National Bank of is currently generating about 0.07 per unit of risk. If you would invest 1,928 in Amreli Steels on August 30, 2024 and sell it today you would earn a total of 212.00 from holding Amreli Steels or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amreli Steels vs. National Bank of
Performance |
| Timeline |
| Amreli Steels |
| National Bank |
Amreli Steels and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amreli Steels and National Bank
The main advantage of trading using opposite Amreli Steels and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amreli Steels position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Amreli Steels vs. Oil and Gas | Amreli Steels vs. Pakistan State Oil | Amreli Steels vs. Pakistan Petroleum | Amreli Steels vs. Fauji Fertilizer |
| National Bank vs. Pakistan Synthetics | National Bank vs. Silkbank | National Bank vs. Big Bird Foods | National Bank vs. Ghani Chemical 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |