Correlation Between Atlas Insurance and National Refinery
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and National Refinery 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 Refinery 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 Refinery, you can compare the effects of market volatilities on Atlas Insurance and National Refinery 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 Refinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and National Refinery.
Diversification Opportunities for Atlas Insurance and National Refinery
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atlas and National is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and National Refinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Refinery 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 Refinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Refinery has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and National Refinery go up and down completely randomly.
Pair Corralation between Atlas Insurance and National Refinery
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 0.69 times more return on investment than National Refinery. However, Atlas Insurance is 1.44 times less risky than National Refinery. It trades about 0.33 of its potential returns per unit of risk. National Refinery is currently generating about 0.09 per unit of risk. If you would invest 3,940 in Atlas Insurance on September 4, 2024 and sell it today you would earn a total of 1,760 from holding Atlas Insurance or generate 44.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Atlas Insurance vs. National Refinery
Performance |
| Timeline |
| Atlas Insurance |
| National Refinery |
Atlas Insurance and National Refinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and National Refinery
The main advantage of trading using opposite Atlas Insurance and National Refinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, National Refinery 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 Refinery will offset losses from the drop in National Refinery's long position.| Atlas Insurance vs. Oil and Gas | Atlas Insurance vs. Pakistan State Oil | Atlas Insurance vs. Pakistan Petroleum | Atlas Insurance vs. Fauji Fertilizer |
| National Refinery vs. Atlas Insurance | National Refinery vs. Jubilee Life Insurance | National Refinery vs. Quice Food Industries | National Refinery vs. The Organic Meat |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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