Correlation Between Ghandhara Automobile and Sindh Modaraba
Can any of the company-specific risk be diversified away by investing in both Ghandhara Automobile and Sindh Modaraba 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 Sindh Modaraba into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ghandhara Automobile and Sindh Modaraba Management, you can compare the effects of market volatilities on Ghandhara Automobile and Sindh Modaraba 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 Sindh Modaraba. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ghandhara Automobile and Sindh Modaraba.
Diversification Opportunities for Ghandhara Automobile and Sindh Modaraba
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ghandhara and Sindh is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ghandhara Automobile and Sindh Modaraba Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sindh Modaraba Management 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 Sindh Modaraba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sindh Modaraba Management has no effect on the direction of Ghandhara Automobile i.e., Ghandhara Automobile and Sindh Modaraba go up and down completely randomly.
Pair Corralation between Ghandhara Automobile and Sindh Modaraba
Assuming the 90 days trading horizon Ghandhara Automobile is expected to generate 1.39 times more return on investment than Sindh Modaraba. However, Ghandhara Automobile is 1.39 times more volatile than Sindh Modaraba Management. It trades about 0.13 of its potential returns per unit of risk. Sindh Modaraba Management is currently generating about 0.14 per unit of risk. If you would invest 22,240 in Ghandhara Automobile on September 2, 2024 and sell it today you would earn a total of 2,134 from holding Ghandhara Automobile or generate 9.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Ghandhara Automobile vs. Sindh Modaraba Management
Performance |
Timeline |
Ghandhara Automobile |
Sindh Modaraba Management |
Ghandhara Automobile and Sindh Modaraba Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ghandhara Automobile and Sindh Modaraba
The main advantage of trading using opposite Ghandhara Automobile and Sindh Modaraba positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ghandhara Automobile position performs unexpectedly, Sindh Modaraba 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 Sindh Modaraba will offset losses from the drop in Sindh Modaraba's long position.Ghandhara Automobile vs. Avanceon | Ghandhara Automobile vs. Pakistan Aluminium Beverage | Ghandhara Automobile vs. Hi Tech Lubricants | Ghandhara Automobile vs. Unity Foods |
Sindh Modaraba vs. Masood Textile Mills | Sindh Modaraba vs. Fauji Foods | Sindh Modaraba vs. KSB Pumps | Sindh Modaraba 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |