Correlation Between East West and Pakistan Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both East West and Pakistan Telecommunicatio 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 Pakistan Telecommunicatio 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 Pakistan Telecommunication, you can compare the effects of market volatilities on East West and Pakistan Telecommunicatio 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 Pakistan Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Pakistan Telecommunicatio.
Diversification Opportunities for East West and Pakistan Telecommunicatio
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between East and Pakistan is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding East West Insurance and Pakistan Telecommunication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Telecommunicatio 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 Pakistan Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Telecommunicatio has no effect on the direction of East West i.e., East West and Pakistan Telecommunicatio go up and down completely randomly.
Pair Corralation between East West and Pakistan Telecommunicatio
If you would invest 1,578 in Pakistan Telecommunication on August 24, 2024 and sell it today you would earn a total of 268.00 from holding Pakistan Telecommunication or generate 16.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 69.57% |
| Values | Daily Returns |
East West Insurance vs. Pakistan Telecommunication
Performance |
| Timeline |
| East West Insurance |
| Pakistan Telecommunicatio |
East West and Pakistan Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Pakistan Telecommunicatio
The main advantage of trading using opposite East West and Pakistan Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, Pakistan Telecommunicatio 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 Pakistan Telecommunicatio will offset losses from the drop in Pakistan Telecommunicatio's long position.| East West vs. Habib Insurance | East West vs. Ghandhara Automobile | East West vs. Century Insurance | East West vs. Reliance Weaving Mills |
| Pakistan Telecommunicatio vs. Masood Textile Mills | Pakistan Telecommunicatio vs. Fauji Foods | Pakistan Telecommunicatio vs. KSB Pumps | Pakistan Telecommunicatio 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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