Correlation Between Ghani Glass and TPL Insurance
Can any of the company-specific risk be diversified away by investing in both Ghani Glass and TPL 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 Ghani Glass and TPL Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ghani Glass and TPL Insurance, you can compare the effects of market volatilities on Ghani Glass and TPL 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 Ghani Glass with a short position of TPL Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ghani Glass and TPL Insurance.
Diversification Opportunities for Ghani Glass and TPL Insurance
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ghani and TPL is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ghani Glass and TPL Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPL Insurance and Ghani Glass 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 Ghani Glass are associated (or correlated) with TPL Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPL Insurance has no effect on the direction of Ghani Glass i.e., Ghani Glass and TPL Insurance go up and down completely randomly.
Pair Corralation between Ghani Glass and TPL Insurance
Assuming the 90 days trading horizon Ghani Glass is expected to generate 0.69 times more return on investment than TPL Insurance. However, Ghani Glass is 1.46 times less risky than TPL Insurance. It trades about 0.08 of its potential returns per unit of risk. TPL Insurance is currently generating about -0.06 per unit of risk. If you would invest 2,575 in Ghani Glass on September 13, 2024 and sell it today you would earn a total of 458.00 from holding Ghani Glass or generate 17.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.9% |
| Values | Daily Returns |
Ghani Glass vs. TPL Insurance
Performance |
| Timeline |
| Ghani Glass |
| TPL Insurance |
Ghani Glass and TPL Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ghani Glass and TPL Insurance
The main advantage of trading using opposite Ghani Glass and TPL Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ghani Glass position performs unexpectedly, TPL 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 TPL Insurance will offset losses from the drop in TPL Insurance's long position.| Ghani Glass vs. Masood Textile Mills | Ghani Glass vs. Fauji Foods | Ghani Glass vs. KSB Pumps | Ghani Glass vs. Mari Petroleum |
| TPL Insurance vs. Masood Textile Mills | TPL Insurance vs. Fauji Foods | TPL Insurance vs. KSB Pumps | TPL 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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