Correlation Between Century Insurance and Mughal Iron
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By analyzing existing cross correlation between Century Insurance and Mughal Iron Steel, you can compare the effects of market volatilities on Century Insurance and Mughal 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 Century Insurance with a short position of Mughal Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Insurance and Mughal Iron.
Diversification Opportunities for Century Insurance and Mughal Iron
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and Mughal is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Century Insurance and Mughal Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mughal Iron Steel 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 Mughal Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mughal Iron Steel has no effect on the direction of Century Insurance i.e., Century Insurance and Mughal Iron go up and down completely randomly.
Pair Corralation between Century Insurance and Mughal Iron
Assuming the 90 days trading horizon Century Insurance is expected to generate 1.45 times more return on investment than Mughal Iron. However, Century Insurance is 1.45 times more volatile than Mughal Iron Steel. It trades about 0.11 of its potential returns per unit of risk. Mughal Iron Steel is currently generating about 0.06 per unit of risk. If you would invest 1,170 in Century Insurance on September 12, 2024 and sell it today you would earn a total of 2,580 from holding Century Insurance or generate 220.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 65.91% |
| Values | Daily Returns |
Century Insurance vs. Mughal Iron Steel
Performance |
| Timeline |
| Century Insurance |
| Mughal Iron Steel |
Century Insurance and Mughal Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Insurance and Mughal Iron
The main advantage of trading using opposite Century Insurance and Mughal Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Insurance position performs unexpectedly, Mughal 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 Mughal Iron will offset losses from the drop in Mughal Iron's long position.| Century Insurance vs. Masood Textile Mills | Century Insurance vs. Fauji Foods | Century Insurance vs. KSB Pumps | Century Insurance vs. Mari Petroleum |
| Mughal Iron vs. Nimir Industrial Chemical | Mughal Iron vs. EFU General Insurance | Mughal Iron vs. Beco Steel | Mughal Iron vs. Century 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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