Correlation Between Fateh Sports and Ghani Chemical
Can any of the company-specific risk be diversified away by investing in both Fateh Sports and Ghani Chemical 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 Fateh Sports and Ghani Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fateh Sports Wear and Ghani Chemical Industries, you can compare the effects of market volatilities on Fateh Sports and Ghani Chemical 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 Fateh Sports with a short position of Ghani Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fateh Sports and Ghani Chemical.
Diversification Opportunities for Fateh Sports and Ghani Chemical
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fateh and Ghani is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fateh Sports Wear and Ghani Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ghani Chemical Industries and Fateh Sports 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 Fateh Sports Wear are associated (or correlated) with Ghani Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ghani Chemical Industries has no effect on the direction of Fateh Sports i.e., Fateh Sports and Ghani Chemical go up and down completely randomly.
Pair Corralation between Fateh Sports and Ghani Chemical
Assuming the 90 days trading horizon Fateh Sports Wear is expected to generate 0.84 times more return on investment than Ghani Chemical. However, Fateh Sports Wear is 1.2 times less risky than Ghani Chemical. It trades about 0.45 of its potential returns per unit of risk. Ghani Chemical Industries is currently generating about 0.15 per unit of risk. If you would invest 7,857 in Fateh Sports Wear on November 8, 2024 and sell it today you would earn a total of 1,643 from holding Fateh Sports Wear or generate 20.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Fateh Sports Wear vs. Ghani Chemical Industries
Performance |
| Timeline |
| Fateh Sports Wear |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ghani Chemical Industries |
Fateh Sports and Ghani Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fateh Sports and Ghani Chemical
The main advantage of trading using opposite Fateh Sports and Ghani Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fateh Sports position performs unexpectedly, Ghani Chemical 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 Ghani Chemical will offset losses from the drop in Ghani Chemical's long position.| Fateh Sports vs. Universal Insurance | Fateh Sports vs. National Bank of | Fateh Sports vs. MCB Bank | Fateh Sports vs. MCB Investment Manag |
| Ghani Chemical vs. Ghandhara Automobile | Ghani Chemical vs. 786 Investment Limited | Ghani Chemical vs. Sitara Chemical Industries | Ghani Chemical vs. National Foods |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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