Correlation Between Avanceon and Askari General
Can any of the company-specific risk be diversified away by investing in both Avanceon and Askari General 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 Avanceon and Askari General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanceon and Askari General Insurance, you can compare the effects of market volatilities on Avanceon and Askari General 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 Avanceon with a short position of Askari General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanceon and Askari General.
Diversification Opportunities for Avanceon and Askari General
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avanceon and Askari is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Avanceon and Askari General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Askari General Insurance and Avanceon 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 Avanceon are associated (or correlated) with Askari General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Askari General Insurance has no effect on the direction of Avanceon i.e., Avanceon and Askari General go up and down completely randomly.
Pair Corralation between Avanceon and Askari General
Assuming the 90 days trading horizon Avanceon is expected to generate 24.64 times less return on investment than Askari General. But when comparing it to its historical volatility, Avanceon is 1.04 times less risky than Askari General. It trades about 0.01 of its potential returns per unit of risk. Askari General Insurance is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,435 in Askari General Insurance on September 4, 2024 and sell it today you would earn a total of 1,151 from holding Askari General Insurance or generate 80.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.58% |
| Values | Daily Returns |
Avanceon vs. Askari General Insurance
Performance |
| Timeline |
| Avanceon |
| Askari General Insurance |
Avanceon and Askari General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanceon and Askari General
The main advantage of trading using opposite Avanceon and Askari General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanceon position performs unexpectedly, Askari General 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 Askari General will offset losses from the drop in Askari General's long position.| Avanceon vs. Masood Textile Mills | Avanceon vs. Fauji Foods | Avanceon vs. KSB Pumps | Avanceon vs. Mari Petroleum |
| Askari General vs. Oil and Gas | Askari General vs. Pakistan State Oil | Askari General vs. Pakistan Petroleum | Askari General vs. Fauji Fertilizer |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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