Correlation Between Atlas Insurance and Adamjee Insurance
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and Adamjee Insurance 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 Atlas Insurance and Adamjee Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and Adamjee Insurance, you can compare the effects of market volatilities on Atlas Insurance and Adamjee Insurance 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 Atlas Insurance with a short position of Adamjee Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and Adamjee Insurance.
Diversification Opportunities for Atlas Insurance and Adamjee Insurance
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlas and Adamjee is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and Adamjee Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adamjee Insurance and Atlas Insurance 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 Atlas Insurance are associated (or correlated) with Adamjee Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adamjee Insurance has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and Adamjee Insurance go up and down completely randomly.
Pair Corralation between Atlas Insurance and Adamjee Insurance
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 0.63 times more return on investment than Adamjee Insurance. However, Atlas Insurance is 1.59 times less risky than Adamjee Insurance. It trades about 0.07 of its potential returns per unit of risk. Adamjee Insurance is currently generating about -0.06 per unit of risk. If you would invest 5,645 in Atlas Insurance on November 9, 2024 and sell it today you would earn a total of 116.00 from holding Atlas Insurance or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Insurance vs. Adamjee Insurance
Performance |
| Timeline |
| Atlas Insurance |
| Adamjee Insurance |
Atlas Insurance and Adamjee Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and Adamjee Insurance
The main advantage of trading using opposite Atlas Insurance and Adamjee Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, Adamjee Insurance 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 Adamjee Insurance will offset losses from the drop in Adamjee Insurance's long position.| Atlas Insurance vs. Honda Atlas Cars | Atlas Insurance vs. Shifa International Hospitals | Atlas Insurance vs. JS Investments | Atlas Insurance vs. Universal Insurance |
| Adamjee Insurance vs. EFU General Insurance | Adamjee Insurance vs. Shaheen Insurance | Adamjee Insurance vs. Apna Microfinance Bank | Adamjee Insurance vs. Bank of Punjab |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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