Correlation Between Atlas Insurance and Bank of Punjab
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and Bank of Punjab 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 of Punjab 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 of Punjab, you can compare the effects of market volatilities on Atlas Insurance and Bank of Punjab 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 of Punjab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and Bank of Punjab.
Diversification Opportunities for Atlas Insurance and Bank of Punjab
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Atlas and Bank is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and Bank of Punjab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Punjab 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 of Punjab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Punjab has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and Bank of Punjab go up and down completely randomly.
Pair Corralation between Atlas Insurance and Bank of Punjab
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 0.75 times more return on investment than Bank of Punjab. However, Atlas Insurance is 1.33 times less risky than Bank of Punjab. It trades about 0.1 of its potential returns per unit of risk. Bank of Punjab is currently generating about 0.05 per unit of risk. If you would invest 2,739 in Atlas Insurance on August 24, 2024 and sell it today you would earn a total of 2,780 from holding Atlas Insurance or generate 101.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 81.65% |
| Values | Daily Returns |
Atlas Insurance vs. Bank of Punjab
Performance |
| Timeline |
| Atlas Insurance |
| Bank of Punjab |
Atlas Insurance and Bank of Punjab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and Bank of Punjab
The main advantage of trading using opposite Atlas Insurance and Bank of Punjab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, Bank of Punjab 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 of Punjab will offset losses from the drop in Bank of Punjab's long position.| Atlas Insurance vs. Oil and Gas | Atlas Insurance vs. Lotte Chemical Pakistan | Atlas Insurance vs. Ghani Chemical Industries | Atlas Insurance vs. Unity Foods |
| Bank of Punjab vs. Habib Bank | Bank of Punjab vs. National Bank of | Bank of Punjab vs. MCB Bank | Bank of Punjab vs. Allied Bank |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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