Correlation Between Engro Polymer and National Bank
Can any of the company-specific risk be diversified away by investing in both Engro Polymer and National Bank 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 Engro Polymer and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Engro Polymer Chemicals and National Bank of, you can compare the effects of market volatilities on Engro Polymer and National Bank 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 Polymer with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Engro Polymer and National Bank.
Diversification Opportunities for Engro Polymer and National Bank
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Engro and National is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Engro Polymer Chemicals and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Engro Polymer 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 Polymer Chemicals are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Engro Polymer i.e., Engro Polymer and National Bank go up and down completely randomly.
Pair Corralation between Engro Polymer and National Bank
Assuming the 90 days trading horizon Engro Polymer is expected to generate 1.1 times less return on investment than National Bank. In addition to that, Engro Polymer is 1.13 times more volatile than National Bank of. It trades about 0.22 of its total potential returns per unit of risk. National Bank of is currently generating about 0.27 per unit of volatility. If you would invest 6,070 in National Bank of on September 2, 2024 and sell it today you would earn a total of 1,024 from holding National Bank of or generate 16.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Engro Polymer Chemicals vs. National Bank of
Performance |
| Timeline |
| Engro Polymer Chemicals |
| National Bank |
Engro Polymer and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Engro Polymer and National Bank
The main advantage of trading using opposite Engro Polymer and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Engro Polymer position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Engro Polymer vs. Masood Textile Mills | Engro Polymer vs. Fauji Foods | Engro Polymer vs. KSB Pumps | Engro Polymer vs. Mari Petroleum |
| National Bank vs. Masood Textile Mills | National Bank vs. Fauji Foods | National Bank vs. KSB Pumps | National Bank vs. Mari Petroleum |
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
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |