Correlation Between Bank of Punjab and ITTEFAQ Iron
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By analyzing existing cross correlation between Bank of Punjab and ITTEFAQ Iron Industries, you can compare the effects of market volatilities on Bank of Punjab and ITTEFAQ Iron 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 Bank of Punjab with a short position of ITTEFAQ Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Punjab and ITTEFAQ Iron.
Diversification Opportunities for Bank of Punjab and ITTEFAQ Iron
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and ITTEFAQ is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Punjab and ITTEFAQ Iron Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITTEFAQ Iron Industries and Bank of Punjab 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 Bank of Punjab are associated (or correlated) with ITTEFAQ Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITTEFAQ Iron Industries has no effect on the direction of Bank of Punjab i.e., Bank of Punjab and ITTEFAQ Iron go up and down completely randomly.
Pair Corralation between Bank of Punjab and ITTEFAQ Iron
Assuming the 90 days trading horizon Bank of Punjab is expected to generate 0.83 times more return on investment than ITTEFAQ Iron. However, Bank of Punjab is 1.21 times less risky than ITTEFAQ Iron. It trades about 0.08 of its potential returns per unit of risk. ITTEFAQ Iron Industries is currently generating about 0.04 per unit of risk. If you would invest 368.00 in Bank of Punjab on October 25, 2024 and sell it today you would earn a total of 627.00 from holding Bank of Punjab or generate 170.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bank of Punjab vs. ITTEFAQ Iron Industries
Performance |
| Timeline |
| Bank of Punjab |
| ITTEFAQ Iron Industries |
Bank of Punjab and ITTEFAQ Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Punjab and ITTEFAQ Iron
The main advantage of trading using opposite Bank of Punjab and ITTEFAQ Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Punjab position performs unexpectedly, ITTEFAQ Iron 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 ITTEFAQ Iron will offset losses from the drop in ITTEFAQ Iron's long position.| Bank of Punjab vs. Ghani Chemical Industries | Bank of Punjab vs. Pak Datacom | Bank of Punjab vs. Wah Nobel Chemicals | Bank of Punjab vs. Ittehad Chemicals |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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