Correlation Between Habib Bank and Attock Petroleum
Can any of the company-specific risk be diversified away by investing in both Habib Bank and Attock Petroleum 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 Habib Bank and Attock Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Habib Bank and Attock Petroleum, you can compare the effects of market volatilities on Habib Bank and Attock Petroleum 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 Habib Bank with a short position of Attock Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Bank and Attock Petroleum.
Diversification Opportunities for Habib Bank and Attock Petroleum
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Habib and Attock is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Habib Bank and Attock Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Attock Petroleum and Habib Bank 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 Habib Bank are associated (or correlated) with Attock Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Attock Petroleum has no effect on the direction of Habib Bank i.e., Habib Bank and Attock Petroleum go up and down completely randomly.
Pair Corralation between Habib Bank and Attock Petroleum
Assuming the 90 days trading horizon Habib Bank is expected to under-perform the Attock Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Habib Bank is 1.1 times less risky than Attock Petroleum. The stock trades about -0.44 of its potential returns per unit of risk. The Attock Petroleum is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 47,765 in Attock Petroleum on November 28, 2024 and sell it today you would lose (1,320) from holding Attock Petroleum or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Habib Bank vs. Attock Petroleum
Performance |
| Timeline |
| Habib Bank |
| Attock Petroleum |
Habib Bank and Attock Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Bank and Attock Petroleum
The main advantage of trading using opposite Habib Bank and Attock Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Bank position performs unexpectedly, Attock Petroleum 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 Attock Petroleum will offset losses from the drop in Attock Petroleum's long position.| Habib Bank vs. Metropolitan Steel Corp | Habib Bank vs. Unity Foods | Habib Bank vs. Ghandhara Automobile | Habib Bank vs. Engro Polymer Chemicals |
| Attock Petroleum vs. Matco Foods | Attock Petroleum vs. National Foods | Attock Petroleum vs. The Organic Meat | Attock Petroleum vs. Pak Datacom |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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