Correlation Between EFU General and ITTEFAQ Iron
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By analyzing existing cross correlation between EFU General Insurance and ITTEFAQ Iron Industries, you can compare the effects of market volatilities on EFU General and ITTEFAQ 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 EFU General with a short position of ITTEFAQ Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of EFU General and ITTEFAQ Iron.
Diversification Opportunities for EFU General and ITTEFAQ Iron
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EFU and ITTEFAQ is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding EFU General Insurance and ITTEFAQ Iron Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITTEFAQ Iron Industries and EFU General 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 EFU General Insurance are associated (or correlated) with ITTEFAQ Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITTEFAQ Iron Industries has no effect on the direction of EFU General i.e., EFU General and ITTEFAQ Iron go up and down completely randomly.
Pair Corralation between EFU General and ITTEFAQ Iron
Assuming the 90 days trading horizon EFU General Insurance is expected to generate 0.75 times more return on investment than ITTEFAQ Iron. However, EFU General Insurance is 1.33 times less risky than ITTEFAQ Iron. It trades about 0.05 of its potential returns per unit of risk. ITTEFAQ Iron Industries is currently generating about -0.11 per unit of risk. If you would invest 11,601 in EFU General Insurance on November 4, 2024 and sell it today you would earn a total of 296.00 from holding EFU General Insurance or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EFU General Insurance vs. ITTEFAQ Iron Industries
Performance |
| Timeline |
| EFU General Insurance |
| ITTEFAQ Iron Industries |
EFU General and ITTEFAQ Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EFU General and ITTEFAQ Iron
The main advantage of trading using opposite EFU General and ITTEFAQ Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EFU General position performs unexpectedly, ITTEFAQ 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 ITTEFAQ Iron will offset losses from the drop in ITTEFAQ Iron's long position.| EFU General vs. Pakistan Aluminium Beverage | EFU General vs. Quice Food Industries | EFU General vs. Fauji Foods | EFU General vs. Big Bird Foods |
| ITTEFAQ Iron vs. Crescent Star Insurance | ITTEFAQ Iron vs. Quice Food Industries | ITTEFAQ Iron vs. 786 Investment Limited | ITTEFAQ Iron vs. United 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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