Correlation Between Engro and Mughal Iron
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By analyzing existing cross correlation between Engro and Mughal Iron Steel, you can compare the effects of market volatilities on Engro 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 Engro with a short position of Mughal Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Engro and Mughal Iron.
Diversification Opportunities for Engro and Mughal Iron
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Engro and Mughal is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Engro 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 Engro 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 Engro 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 Engro i.e., Engro and Mughal Iron go up and down completely randomly.
Pair Corralation between Engro and Mughal Iron
Assuming the 90 days trading horizon Engro is expected to generate 0.65 times more return on investment than Mughal Iron. However, Engro is 1.55 times less risky than Mughal Iron. It trades about 0.13 of its potential returns per unit of risk. Mughal Iron Steel is currently generating about -0.13 per unit of risk. If you would invest 31,107 in Engro on August 26, 2024 and sell it today you would earn a total of 2,669 from holding Engro or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Engro vs. Mughal Iron Steel
Performance |
| Timeline |
| Engro |
| Mughal Iron Steel |
Engro and Mughal Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Engro and Mughal Iron
The main advantage of trading using opposite Engro and Mughal Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Engro 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.| Engro vs. EFU General Insurance | Engro vs. Pak Datacom | Engro vs. National Foods | Engro vs. National Bank of |
| Mughal Iron vs. Oil and Gas | Mughal Iron vs. Pakistan State Oil | Mughal Iron vs. Pakistan Petroleum | Mughal Iron vs. Engro |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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