Correlation Between Grays Leasing and Ghandhara Automobile
Can any of the company-specific risk be diversified away by investing in both Grays Leasing and Ghandhara Automobile 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 Grays Leasing and Ghandhara Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grays Leasing and Ghandhara Automobile, you can compare the effects of market volatilities on Grays Leasing and Ghandhara Automobile 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 Grays Leasing with a short position of Ghandhara Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grays Leasing and Ghandhara Automobile.
Diversification Opportunities for Grays Leasing and Ghandhara Automobile
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grays and Ghandhara is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Grays Leasing and Ghandhara Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ghandhara Automobile and Grays Leasing 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 Grays Leasing are associated (or correlated) with Ghandhara Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ghandhara Automobile has no effect on the direction of Grays Leasing i.e., Grays Leasing and Ghandhara Automobile go up and down completely randomly.
Pair Corralation between Grays Leasing and Ghandhara Automobile
Assuming the 90 days trading horizon Grays Leasing is expected to under-perform the Ghandhara Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Grays Leasing is 1.11 times less risky than Ghandhara Automobile. The stock trades about -0.12 of its potential returns per unit of risk. The Ghandhara Automobile is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 30,703 in Ghandhara Automobile on November 7, 2024 and sell it today you would earn a total of 16,101 from holding Ghandhara Automobile or generate 52.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Grays Leasing vs. Ghandhara Automobile
Performance |
| Timeline |
| Grays Leasing |
| Ghandhara Automobile |
Grays Leasing and Ghandhara Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grays Leasing and Ghandhara Automobile
The main advantage of trading using opposite Grays Leasing and Ghandhara Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grays Leasing position performs unexpectedly, Ghandhara Automobile 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 Ghandhara Automobile will offset losses from the drop in Ghandhara Automobile's long position.| Grays Leasing vs. Fauji Foods | Grays Leasing vs. Habib Insurance | Grays Leasing vs. Sindh Modaraba Management | Grays Leasing vs. Shaheen Insurance |
| Ghandhara Automobile vs. Habib Insurance | Ghandhara Automobile vs. Shadab Textile Mills | Ghandhara Automobile vs. Century Insurance | Ghandhara Automobile vs. Reliance Weaving Mills |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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