Correlation Between Century Insurance and Gulistan Spinning
Can any of the company-specific risk be diversified away by investing in both Century Insurance and Gulistan Spinning 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 Gulistan Spinning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Insurance and Gulistan Spinning Mills, you can compare the effects of market volatilities on Century Insurance and Gulistan Spinning 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 Gulistan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Insurance and Gulistan Spinning.
Diversification Opportunities for Century Insurance and Gulistan Spinning
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Century and Gulistan is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Century Insurance and Gulistan Spinning Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulistan Spinning Mills 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 Gulistan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulistan Spinning Mills has no effect on the direction of Century Insurance i.e., Century Insurance and Gulistan Spinning go up and down completely randomly.
Pair Corralation between Century Insurance and Gulistan Spinning
Assuming the 90 days trading horizon Century Insurance is expected to generate 0.37 times more return on investment than Gulistan Spinning. However, Century Insurance is 2.69 times less risky than Gulistan Spinning. It trades about 0.32 of its potential returns per unit of risk. Gulistan Spinning Mills is currently generating about 0.01 per unit of risk. If you would invest 3,265 in Century Insurance on September 13, 2024 and sell it today you would earn a total of 484.00 from holding Century Insurance or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Century Insurance vs. Gulistan Spinning Mills
Performance |
| Timeline |
| Century Insurance |
| Gulistan Spinning Mills |
Century Insurance and Gulistan Spinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Insurance and Gulistan Spinning
The main advantage of trading using opposite Century Insurance and Gulistan Spinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Insurance position performs unexpectedly, Gulistan Spinning 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 Gulistan Spinning will offset losses from the drop in Gulistan Spinning's long position.| Century Insurance vs. Masood Textile Mills | Century Insurance vs. Fauji Foods | Century Insurance vs. KSB Pumps | Century Insurance vs. Mari Petroleum |
| Gulistan Spinning vs. Pakistan Telecommunication | Gulistan Spinning vs. Century Insurance | Gulistan Spinning vs. Habib Insurance | Gulistan Spinning vs. Atlas Insurance |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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