Correlation Between Atlas Insurance and KOT Addu
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and KOT Addu 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 KOT Addu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and KOT Addu Power, you can compare the effects of market volatilities on Atlas Insurance and KOT Addu 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 KOT Addu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and KOT Addu.
Diversification Opportunities for Atlas Insurance and KOT Addu
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atlas and KOT is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and KOT Addu Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOT Addu Power 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 KOT Addu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOT Addu Power has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and KOT Addu go up and down completely randomly.
Pair Corralation between Atlas Insurance and KOT Addu
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 0.77 times more return on investment than KOT Addu. However, Atlas Insurance is 1.29 times less risky than KOT Addu. It trades about 0.22 of its potential returns per unit of risk. KOT Addu Power is currently generating about 0.1 per unit of risk. If you would invest 3,802 in Atlas Insurance on August 31, 2024 and sell it today you would earn a total of 1,698 from holding Atlas Insurance or generate 44.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.72% |
| Values | Daily Returns |
Atlas Insurance vs. KOT Addu Power
Performance |
| Timeline |
| Atlas Insurance |
| KOT Addu Power |
Atlas Insurance and KOT Addu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and KOT Addu
The main advantage of trading using opposite Atlas Insurance and KOT Addu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, KOT Addu 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 KOT Addu will offset losses from the drop in KOT Addu's 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 |
| KOT Addu vs. Pakistan Tobacco | KOT Addu vs. Unilever Pakistan Foods | KOT Addu vs. Atlas Insurance | KOT Addu vs. East West 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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