Correlation Between Atlas Insurance and Dost Steels
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and Dost Steels 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 Dost Steels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and Dost Steels, you can compare the effects of market volatilities on Atlas Insurance and Dost Steels 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 Dost Steels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and Dost Steels.
Diversification Opportunities for Atlas Insurance and Dost Steels
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atlas and Dost is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and Dost Steels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dost Steels 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 Dost Steels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dost Steels has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and Dost Steels go up and down completely randomly.
Pair Corralation between Atlas Insurance and Dost Steels
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 0.67 times more return on investment than Dost Steels. However, Atlas Insurance is 1.49 times less risky than Dost Steels. It trades about 0.13 of its potential returns per unit of risk. Dost Steels is currently generating about 0.03 per unit of risk. If you would invest 2,775 in Atlas Insurance on August 31, 2024 and sell it today you would earn a total of 2,825 from holding Atlas Insurance or generate 101.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.46% |
| Values | Daily Returns |
Atlas Insurance vs. Dost Steels
Performance |
| Timeline |
| Atlas Insurance |
| Dost Steels |
Atlas Insurance and Dost Steels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and Dost Steels
The main advantage of trading using opposite Atlas Insurance and Dost Steels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, Dost Steels 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 Dost Steels will offset losses from the drop in Dost Steels' long position.| Atlas Insurance vs. National Foods | Atlas Insurance vs. Ghani Chemical Industries | Atlas Insurance vs. Aisha Steel Mills | Atlas Insurance vs. Lotte Chemical Pakistan |
| Dost Steels vs. Masood Textile Mills | Dost Steels vs. Fauji Foods | Dost Steels vs. KSB Pumps | Dost Steels vs. Mari Petroleum |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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