Correlation Between Habib Insurance and Askari General
Can any of the company-specific risk be diversified away by investing in both Habib Insurance and Askari General 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 Insurance and Askari General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Habib Insurance and Askari General Insurance, you can compare the effects of market volatilities on Habib Insurance and Askari General 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 Insurance with a short position of Askari General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and Askari General.
Diversification Opportunities for Habib Insurance and Askari General
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Habib and Askari is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and Askari General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Askari General Insurance and Habib Insurance 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 Insurance are associated (or correlated) with Askari General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Askari General Insurance has no effect on the direction of Habib Insurance i.e., Habib Insurance and Askari General go up and down completely randomly.
Pair Corralation between Habib Insurance and Askari General
Assuming the 90 days trading horizon Habib Insurance is expected to generate 1.48 times less return on investment than Askari General. In addition to that, Habib Insurance is 1.66 times more volatile than Askari General Insurance. It trades about 0.05 of its total potential returns per unit of risk. Askari General Insurance is currently generating about 0.12 per unit of volatility. If you would invest 1,435 in Askari General Insurance on September 4, 2024 and sell it today you would earn a total of 1,151 from holding Askari General Insurance or generate 80.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.05% |
| Values | Daily Returns |
Habib Insurance vs. Askari General Insurance
Performance |
| Timeline |
| Habib Insurance |
| Askari General Insurance |
Habib Insurance and Askari General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and Askari General
The main advantage of trading using opposite Habib Insurance and Askari General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance position performs unexpectedly, Askari General 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 Askari General will offset losses from the drop in Askari General's long position.| Habib Insurance vs. Pakistan Telecommunication | Habib Insurance vs. National Foods | Habib Insurance vs. Air Link Communication | Habib Insurance vs. Quice Food Industries |
| Askari General vs. Oil and Gas | Askari General vs. Pakistan State Oil | Askari General vs. Pakistan Petroleum | Askari General 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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