Correlation Between Ghandhara Automobile and Adamjee Insurance
Can any of the company-specific risk be diversified away by investing in both Ghandhara Automobile and Adamjee 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 Ghandhara Automobile and Adamjee Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ghandhara Automobile and Adamjee Insurance, you can compare the effects of market volatilities on Ghandhara Automobile and Adamjee 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 Ghandhara Automobile with a short position of Adamjee Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ghandhara Automobile and Adamjee Insurance.
Diversification Opportunities for Ghandhara Automobile and Adamjee Insurance
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ghandhara and Adamjee is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ghandhara Automobile and Adamjee Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adamjee Insurance and Ghandhara Automobile 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 Ghandhara Automobile are associated (or correlated) with Adamjee Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adamjee Insurance has no effect on the direction of Ghandhara Automobile i.e., Ghandhara Automobile and Adamjee Insurance go up and down completely randomly.
Pair Corralation between Ghandhara Automobile and Adamjee Insurance
Assuming the 90 days trading horizon Ghandhara Automobile is expected to generate 2.15 times more return on investment than Adamjee Insurance. However, Ghandhara Automobile is 2.15 times more volatile than Adamjee Insurance. It trades about 0.15 of its potential returns per unit of risk. Adamjee Insurance is currently generating about 0.07 per unit of risk. If you would invest 3,338 in Ghandhara Automobile on August 30, 2024 and sell it today you would earn a total of 21,355 from holding Ghandhara Automobile or generate 639.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.66% |
| Values | Daily Returns |
Ghandhara Automobile vs. Adamjee Insurance
Performance |
| Timeline |
| Ghandhara Automobile |
| Adamjee Insurance |
Ghandhara Automobile and Adamjee Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ghandhara Automobile and Adamjee Insurance
The main advantage of trading using opposite Ghandhara Automobile and Adamjee Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ghandhara Automobile position performs unexpectedly, Adamjee 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 Adamjee Insurance will offset losses from the drop in Adamjee Insurance's long position.| Ghandhara Automobile vs. Habib Insurance | Ghandhara Automobile vs. Century Insurance | Ghandhara Automobile vs. Reliance Weaving Mills | Ghandhara Automobile vs. Media Times |
| Adamjee Insurance vs. Masood Textile Mills | Adamjee Insurance vs. Fauji Foods | Adamjee Insurance vs. KSB Pumps | Adamjee 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |