Correlation Between Atlas Insurance and Habib Insurance
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and Habib 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 Habib 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 Habib Insurance, you can compare the effects of market volatilities on Atlas Insurance and Habib 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 Habib Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and Habib Insurance.
Diversification Opportunities for Atlas Insurance and Habib Insurance
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Atlas and Habib is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and Habib Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib 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 Habib Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Insurance has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and Habib Insurance go up and down completely randomly.
Pair Corralation between Atlas Insurance and Habib Insurance
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 0.54 times more return on investment than Habib Insurance. However, Atlas Insurance is 1.85 times less risky than Habib Insurance. It trades about 0.48 of its potential returns per unit of risk. Habib Insurance is currently generating about 0.08 per unit of risk. If you would invest 4,532 in Atlas Insurance on August 26, 2024 and sell it today you would earn a total of 987.00 from holding Atlas Insurance or generate 21.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Atlas Insurance vs. Habib Insurance
Performance |
| Timeline |
| Atlas Insurance |
| Habib Insurance |
Atlas Insurance and Habib Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and Habib Insurance
The main advantage of trading using opposite Atlas Insurance and Habib Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, Habib 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 Habib Insurance will offset losses from the drop in Habib Insurance's long position.| Atlas Insurance vs. Habib Bank | Atlas Insurance vs. National Bank of | Atlas Insurance vs. United Bank | Atlas Insurance vs. MCB Bank |
| Habib Insurance vs. Habib Bank | Habib Insurance vs. National Bank of | Habib Insurance vs. United Bank | Habib Insurance vs. MCB 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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