Correlation Between Dost Steels and Unilever Pakistan
Can any of the company-specific risk be diversified away by investing in both Dost Steels and Unilever Pakistan 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 Dost Steels and Unilever Pakistan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dost Steels and Unilever Pakistan Foods, you can compare the effects of market volatilities on Dost Steels and Unilever Pakistan 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 Dost Steels with a short position of Unilever Pakistan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dost Steels and Unilever Pakistan.
Diversification Opportunities for Dost Steels and Unilever Pakistan
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dost and Unilever is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dost Steels and Unilever Pakistan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever Pakistan Foods and Dost Steels 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 Dost Steels are associated (or correlated) with Unilever Pakistan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever Pakistan Foods has no effect on the direction of Dost Steels i.e., Dost Steels and Unilever Pakistan go up and down completely randomly.
Pair Corralation between Dost Steels and Unilever Pakistan
Assuming the 90 days trading horizon Dost Steels is expected to generate 1.13 times more return on investment than Unilever Pakistan. However, Dost Steels is 1.13 times more volatile than Unilever Pakistan Foods. It trades about 0.03 of its potential returns per unit of risk. Unilever Pakistan Foods is currently generating about -0.01 per unit of risk. If you would invest 517.00 in Dost Steels on September 2, 2024 and sell it today you would earn a total of 159.00 from holding Dost Steels or generate 30.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 61.73% |
| Values | Daily Returns |
Dost Steels vs. Unilever Pakistan Foods
Performance |
| Timeline |
| Dost Steels |
| Unilever Pakistan Foods |
Dost Steels and Unilever Pakistan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dost Steels and Unilever Pakistan
The main advantage of trading using opposite Dost Steels and Unilever Pakistan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dost Steels position performs unexpectedly, Unilever Pakistan 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 Unilever Pakistan will offset losses from the drop in Unilever Pakistan's long position.| Dost Steels vs. Pakistan Telecommunication | Dost Steels vs. Askari Bank | Dost Steels vs. Adamjee Insurance | Dost Steels vs. Soneri Bank |
| Unilever Pakistan vs. Engro Polymer Chemicals | Unilever Pakistan vs. Lotte Chemical Pakistan | Unilever Pakistan vs. Ittehad Chemicals | Unilever Pakistan vs. Allied 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| CEOs Directory Screen CEOs from public companies around the world |