Correlation Between Big Bird and Shaheen Insurance
Can any of the company-specific risk be diversified away by investing in both Big Bird and Shaheen 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 Big Bird and Shaheen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Bird Foods and Shaheen Insurance, you can compare the effects of market volatilities on Big Bird and Shaheen 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 Big Bird with a short position of Shaheen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Bird and Shaheen Insurance.
Diversification Opportunities for Big Bird and Shaheen Insurance
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Big and Shaheen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Big Bird Foods and Shaheen Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaheen Insurance and Big Bird 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 Big Bird Foods are associated (or correlated) with Shaheen Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaheen Insurance has no effect on the direction of Big Bird i.e., Big Bird and Shaheen Insurance go up and down completely randomly.
Pair Corralation between Big Bird and Shaheen Insurance
Assuming the 90 days trading horizon Big Bird Foods is expected to generate 0.8 times more return on investment than Shaheen Insurance. However, Big Bird Foods is 1.26 times less risky than Shaheen Insurance. It trades about 0.07 of its potential returns per unit of risk. Shaheen Insurance is currently generating about 0.06 per unit of risk. If you would invest 5,232 in Big Bird Foods on August 24, 2024 and sell it today you would earn a total of 951.00 from holding Big Bird Foods or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 20.53% |
| Values | Daily Returns |
Big Bird Foods vs. Shaheen Insurance
Performance |
| Timeline |
| Big Bird Foods |
| Shaheen Insurance |
Big Bird and Shaheen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Bird and Shaheen Insurance
The main advantage of trading using opposite Big Bird and Shaheen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Bird position performs unexpectedly, Shaheen 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 Shaheen Insurance will offset losses from the drop in Shaheen Insurance's long position.| Big Bird vs. Habib Insurance | Big Bird vs. Ghandhara Automobile | Big Bird vs. Century Insurance | Big Bird vs. Reliance Weaving Mills |
| Shaheen Insurance vs. Habib Bank | Shaheen Insurance vs. National Bank of | Shaheen Insurance vs. United Bank | Shaheen 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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