Correlation Between Century Insurance and Askari General
Can any of the company-specific risk be diversified away by investing in both Century Insurance 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 Century Insurance and Askari General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Insurance and Askari General Insurance, you can compare the effects of market volatilities on Century Insurance 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 Century Insurance with a short position of Askari General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Insurance and Askari General.
Diversification Opportunities for Century Insurance and Askari General
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Century and Askari is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Century Insurance 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 Century 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 Century Insurance 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 Century Insurance i.e., Century Insurance and Askari General go up and down completely randomly.
Pair Corralation between Century Insurance and Askari General
Assuming the 90 days trading horizon Century Insurance is expected to generate 1.17 times more return on investment than Askari General. However, Century Insurance is 1.17 times more volatile than Askari General Insurance. It trades about 0.26 of its potential returns per unit of risk. Askari General Insurance is currently generating about 0.11 per unit of risk. If you would invest 3,050 in Century Insurance on August 24, 2024 and sell it today you would earn a total of 348.00 from holding Century Insurance or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Insurance vs. Askari General Insurance
Performance |
| Timeline |
| Century Insurance |
| Askari General Insurance |
Century Insurance and Askari General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Insurance and Askari General
The main advantage of trading using opposite Century Insurance and Askari General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Insurance 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.| Century Insurance vs. Packages | Century Insurance vs. WorldCall Telecom | Century Insurance vs. Air Link Communication | Century Insurance vs. Nimir Industrial Chemical |
| Askari General vs. Habib Bank | Askari General vs. National Bank of | Askari General vs. United Bank | Askari General 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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