Correlation Between Atlas Insurance and Ghani Chemical
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and Ghani Chemical 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 Ghani Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and Ghani Chemical Industries, you can compare the effects of market volatilities on Atlas Insurance and Ghani Chemical 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 Ghani Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and Ghani Chemical.
Diversification Opportunities for Atlas Insurance and Ghani Chemical
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlas and Ghani is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and Ghani Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ghani Chemical Industries 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 Ghani Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ghani Chemical Industries has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and Ghani Chemical go up and down completely randomly.
Pair Corralation between Atlas Insurance and Ghani Chemical
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 0.61 times more return on investment than Ghani Chemical. However, Atlas Insurance is 1.65 times less risky than Ghani Chemical. It trades about 0.1 of its potential returns per unit of risk. Ghani Chemical Industries is currently generating about 0.06 per unit of risk. If you would invest 2,829 in Atlas Insurance on November 19, 2024 and sell it today you would earn a total of 3,071 from holding Atlas Insurance or generate 108.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.51% |
| Values | Daily Returns |
Atlas Insurance vs. Ghani Chemical Industries
Performance |
| Timeline |
| Atlas Insurance |
| Ghani Chemical Industries |
Atlas Insurance and Ghani Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and Ghani Chemical
The main advantage of trading using opposite Atlas Insurance and Ghani Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, Ghani Chemical 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 Ghani Chemical will offset losses from the drop in Ghani Chemical's long position.| Atlas Insurance vs. TPL Insurance | Atlas Insurance vs. Century Insurance | Atlas Insurance vs. Arpak International Investment | Atlas Insurance vs. Crescent Star Insurance |
| Ghani Chemical vs. Soneri Bank | Ghani Chemical vs. Jubilee Life Insurance | Ghani Chemical vs. Apna Microfinance Bank | Ghani Chemical vs. Matco Foods |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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