Correlation Between East West and Aisha Steel
Can any of the company-specific risk be diversified away by investing in both East West and Aisha Steel 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 East West and Aisha Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Insurance and Aisha Steel Mills, you can compare the effects of market volatilities on East West and Aisha Steel 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 East West with a short position of Aisha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Aisha Steel.
Diversification Opportunities for East West and Aisha Steel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between East and Aisha is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding East West Insurance and Aisha Steel Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aisha Steel Mills and East West 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 East West Insurance are associated (or correlated) with Aisha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aisha Steel Mills has no effect on the direction of East West i.e., East West and Aisha Steel go up and down completely randomly.
Pair Corralation between East West and Aisha Steel
If you would invest 5,729 in East West Insurance on November 5, 2024 and sell it today you would earn a total of 0.00 from holding East West Insurance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 33.33% |
| Values | Daily Returns |
East West Insurance vs. Aisha Steel Mills
Performance |
| Timeline |
| East West Insurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Aisha Steel Mills |
East West and Aisha Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Aisha Steel
The main advantage of trading using opposite East West and Aisha Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, Aisha Steel 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 Aisha Steel will offset losses from the drop in Aisha Steel's long position.| East West vs. Habib Insurance | East West vs. Ghandhara Automobile | East West vs. Shadab Textile Mills | East West vs. Century Insurance |
| Aisha Steel vs. Crescent Star Insurance | Aisha Steel vs. Sitara Chemical Industries | Aisha Steel vs. Century Insurance | Aisha Steel vs. Jubilee Life 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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