Correlation Between First Al and Atlas Insurance
Can any of the company-specific risk be diversified away by investing in both First Al and Atlas Insurance 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 First Al and Atlas Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Al Noor Modaraba and Atlas Insurance, you can compare the effects of market volatilities on First Al and Atlas Insurance 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 First Al with a short position of Atlas Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Al and Atlas Insurance.
Diversification Opportunities for First Al and Atlas Insurance
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Atlas is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding First Al Noor Modaraba and Atlas Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Insurance and First Al 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 First Al Noor Modaraba are associated (or correlated) with Atlas Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Insurance has no effect on the direction of First Al i.e., First Al and Atlas Insurance go up and down completely randomly.
Pair Corralation between First Al and Atlas Insurance
Assuming the 90 days trading horizon First Al Noor Modaraba is expected to under-perform the Atlas Insurance. In addition to that, First Al is 1.9 times more volatile than Atlas Insurance. It trades about -0.09 of its total potential returns per unit of risk. Atlas Insurance is currently generating about 0.4 per unit of volatility. If you would invest 5,009 in Atlas Insurance on September 12, 2024 and sell it today you would earn a total of 1,032 from holding Atlas Insurance or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.61% |
| Values | Daily Returns |
First Al Noor Modaraba vs. Atlas Insurance
Performance |
| Timeline |
| First Al Noor |
| Atlas Insurance |
First Al and Atlas Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Al and Atlas Insurance
The main advantage of trading using opposite First Al and Atlas Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Al position performs unexpectedly, Atlas Insurance 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 Atlas Insurance will offset losses from the drop in Atlas Insurance's long position.| First Al vs. Security Investment Bank | First Al vs. Dost Steels | First Al vs. ITTEFAQ Iron Industries | First Al vs. International Steels |
| Atlas Insurance vs. Masood Textile Mills | Atlas Insurance vs. Fauji Foods | Atlas Insurance vs. KSB Pumps | Atlas Insurance 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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