Correlation Between Atlas Insurance and National Bank
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and National Bank 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 National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and National Bank of, you can compare the effects of market volatilities on Atlas Insurance and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and National Bank.
Diversification Opportunities for Atlas Insurance and National Bank
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Atlas and National is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and National Bank go up and down completely randomly.
Pair Corralation between Atlas Insurance and National Bank
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 1.66 times less return on investment than National Bank. But when comparing it to its historical volatility, Atlas Insurance is 1.43 times less risky than National Bank. It trades about 0.13 of its potential returns per unit of risk. National Bank of is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,023 in National Bank of on August 31, 2024 and sell it today you would earn a total of 5,071 from holding National Bank of or generate 250.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.46% |
| Values | Daily Returns |
Atlas Insurance vs. National Bank of
Performance |
| Timeline |
| Atlas Insurance |
| National Bank |
Atlas Insurance and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and National Bank
The main advantage of trading using opposite Atlas Insurance and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank'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 |
| National Bank vs. Ittehad Chemicals | National Bank vs. Hi Tech Lubricants | National Bank vs. Pak Gulf Leasing | National Bank vs. Grays Leasing |
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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