Correlation Between Ghandhara Automobile and ITTEFAQ Iron
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By analyzing existing cross correlation between Ghandhara Automobile and ITTEFAQ Iron Industries, you can compare the effects of market volatilities on Ghandhara Automobile and ITTEFAQ Iron 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 ITTEFAQ Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ghandhara Automobile and ITTEFAQ Iron.
Diversification Opportunities for Ghandhara Automobile and ITTEFAQ Iron
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ghandhara and ITTEFAQ is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ghandhara Automobile and ITTEFAQ Iron Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITTEFAQ Iron Industries 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 ITTEFAQ Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITTEFAQ Iron Industries has no effect on the direction of Ghandhara Automobile i.e., Ghandhara Automobile and ITTEFAQ Iron go up and down completely randomly.
Pair Corralation between Ghandhara Automobile and ITTEFAQ Iron
Assuming the 90 days trading horizon Ghandhara Automobile is expected to generate 1.27 times more return on investment than ITTEFAQ Iron. However, Ghandhara Automobile is 1.27 times more volatile than ITTEFAQ Iron Industries. It trades about 0.15 of its potential returns per unit of risk. ITTEFAQ Iron Industries is currently generating about 0.02 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 | Strong |
| Accuracy | 77.85% |
| Values | Daily Returns |
Ghandhara Automobile vs. ITTEFAQ Iron Industries
Performance |
| Timeline |
| Ghandhara Automobile |
| ITTEFAQ Iron Industries |
Ghandhara Automobile and ITTEFAQ Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ghandhara Automobile and ITTEFAQ Iron
The main advantage of trading using opposite Ghandhara Automobile and ITTEFAQ Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ghandhara Automobile position performs unexpectedly, ITTEFAQ Iron 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 ITTEFAQ Iron will offset losses from the drop in ITTEFAQ Iron's long position.| Ghandhara Automobile vs. Habib Insurance | Ghandhara Automobile vs. Century Insurance | Ghandhara Automobile vs. Reliance Weaving Mills | Ghandhara Automobile vs. Media Times |
| ITTEFAQ Iron vs. Oil and Gas | ITTEFAQ Iron vs. Pakistan State Oil | ITTEFAQ Iron vs. Pakistan Petroleum | ITTEFAQ Iron vs. Fauji Fertilizer |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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