Correlation Between Fateh Sports and United Insurance
Can any of the company-specific risk be diversified away by investing in both Fateh Sports and United 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 Fateh Sports and United Insurance 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 United Insurance, you can compare the effects of market volatilities on Fateh Sports and United 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 Fateh Sports with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fateh Sports and United Insurance.
Diversification Opportunities for Fateh Sports and United Insurance
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fateh and United is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fateh Sports Wear and United Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Insurance 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 United Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Insurance has no effect on the direction of Fateh Sports i.e., Fateh Sports and United Insurance go up and down completely randomly.
Pair Corralation between Fateh Sports and United Insurance
Assuming the 90 days trading horizon Fateh Sports Wear is expected to under-perform the United Insurance. In addition to that, Fateh Sports is 1.52 times more volatile than United Insurance. It trades about -0.28 of its total potential returns per unit of risk. United Insurance is currently generating about 0.14 per unit of volatility. If you would invest 1,569 in United Insurance on October 25, 2024 and sell it today you would earn a total of 76.00 from holding United Insurance or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 65.0% |
| Values | Daily Returns |
Fateh Sports Wear vs. United Insurance
Performance |
| Timeline |
| Fateh Sports Wear |
| United Insurance |
Fateh Sports and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fateh Sports and United Insurance
The main advantage of trading using opposite Fateh Sports and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fateh Sports position performs unexpectedly, United 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 United Insurance will offset losses from the drop in United Insurance's long position.| Fateh Sports vs. Synthetic Products Enterprises | Fateh Sports vs. Pakistan Synthetics | Fateh Sports vs. JS Investments | Fateh Sports vs. Roshan Packages |
| United Insurance vs. International Steels | United Insurance vs. Invest Capital Investment | United Insurance vs. Amreli Steels | United Insurance vs. MCB Investment Manag |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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