Correlation Between Atlas Insurance and Bank Alfalah
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and Bank Alfalah 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 Bank Alfalah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and Bank Alfalah, you can compare the effects of market volatilities on Atlas Insurance and Bank Alfalah 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 Bank Alfalah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and Bank Alfalah.
Diversification Opportunities for Atlas Insurance and Bank Alfalah
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atlas and Bank is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and Bank Alfalah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Alfalah 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 Bank Alfalah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Alfalah has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and Bank Alfalah go up and down completely randomly.
Pair Corralation between Atlas Insurance and Bank Alfalah
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 1.41 times less return on investment than Bank Alfalah. In addition to that, Atlas Insurance is 1.02 times more volatile than Bank Alfalah. It trades about 0.1 of its total potential returns per unit of risk. Bank Alfalah is currently generating about 0.14 per unit of volatility. If you would invest 2,317 in Bank Alfalah on September 2, 2024 and sell it today you would earn a total of 5,872 from holding Bank Alfalah or generate 253.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 82.72% |
| Values | Daily Returns |
Atlas Insurance vs. Bank Alfalah
Performance |
| Timeline |
| Atlas Insurance |
| Bank Alfalah |
Atlas Insurance and Bank Alfalah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and Bank Alfalah
The main advantage of trading using opposite Atlas Insurance and Bank Alfalah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, Bank Alfalah 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 Bank Alfalah will offset losses from the drop in Bank Alfalah's long position.| Atlas Insurance vs. Habib Bank | Atlas Insurance vs. National Bank of | Atlas Insurance vs. United Bank | Atlas Insurance vs. MCB Bank |
| Bank Alfalah vs. Murree Brewery | Bank Alfalah vs. Ghandhara Automobile | Bank Alfalah vs. Atlas Insurance | Bank Alfalah vs. Century Insurance |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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