Correlation Between Crescent Star and Pakistan Hotel
Can any of the company-specific risk be diversified away by investing in both Crescent Star and Pakistan Hotel 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 Crescent Star and Pakistan Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent Star Insurance and Pakistan Hotel Developers, you can compare the effects of market volatilities on Crescent Star and Pakistan Hotel 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 Crescent Star with a short position of Pakistan Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Star and Pakistan Hotel.
Diversification Opportunities for Crescent Star and Pakistan Hotel
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crescent and Pakistan is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Star Insurance and Pakistan Hotel Developers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Hotel Developers and Crescent Star 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 Crescent Star Insurance are associated (or correlated) with Pakistan Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Hotel Developers has no effect on the direction of Crescent Star i.e., Crescent Star and Pakistan Hotel go up and down completely randomly.
Pair Corralation between Crescent Star and Pakistan Hotel
Assuming the 90 days trading horizon Crescent Star is expected to generate 7.23 times less return on investment than Pakistan Hotel. But when comparing it to its historical volatility, Crescent Star Insurance is 2.34 times less risky than Pakistan Hotel. It trades about 0.06 of its potential returns per unit of risk. Pakistan Hotel Developers is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 7,799 in Pakistan Hotel Developers on September 12, 2024 and sell it today you would lose (2,053) from holding Pakistan Hotel Developers or give up 26.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.42% |
| Values | Daily Returns |
Crescent Star Insurance vs. Pakistan Hotel Developers
Performance |
| Timeline |
| Crescent Star Insurance |
| Pakistan Hotel Developers |
Crescent Star and Pakistan Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Star and Pakistan Hotel
The main advantage of trading using opposite Crescent Star and Pakistan Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Star position performs unexpectedly, Pakistan Hotel 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 Pakistan Hotel will offset losses from the drop in Pakistan Hotel's long position.| Crescent Star vs. Masood Textile Mills | Crescent Star vs. Fauji Foods | Crescent Star vs. KSB Pumps | Crescent Star vs. Mari Petroleum |
| Pakistan Hotel vs. Crescent Star Insurance | Pakistan Hotel vs. Air Link Communication | Pakistan Hotel vs. Grays Leasing | Pakistan Hotel vs. EFU General 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |