Correlation Between Habib Insurance and Askari Bank
Can any of the company-specific risk be diversified away by investing in both Habib Insurance and Askari Bank 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 Bank 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 Bank, you can compare the effects of market volatilities on Habib Insurance and Askari Bank 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 Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and Askari Bank.
Diversification Opportunities for Habib Insurance and Askari Bank
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Habib and Askari is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and Askari Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Askari Bank 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 Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Askari Bank has no effect on the direction of Habib Insurance i.e., Habib Insurance and Askari Bank go up and down completely randomly.
Pair Corralation between Habib Insurance and Askari Bank
Assuming the 90 days trading horizon Habib Insurance is expected to generate 2.02 times more return on investment than Askari Bank. However, Habib Insurance is 2.02 times more volatile than Askari Bank. It trades about 0.04 of its potential returns per unit of risk. Askari Bank is currently generating about 0.07 per unit of risk. If you would invest 532.00 in Habib Insurance on August 26, 2024 and sell it today you would earn a total of 168.00 from holding Habib Insurance or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.4% |
| Values | Daily Returns |
Habib Insurance vs. Askari Bank
Performance |
| Timeline |
| Habib Insurance |
| Askari Bank |
Habib Insurance and Askari Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and Askari Bank
The main advantage of trading using opposite Habib Insurance and Askari Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance position performs unexpectedly, Askari Bank 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 Bank will offset losses from the drop in Askari Bank's long position.| Habib Insurance vs. Habib Bank | Habib Insurance vs. National Bank of | Habib Insurance vs. United Bank | Habib Insurance vs. MCB Bank |
| Askari Bank vs. Air Link Communication | Askari Bank vs. Security Investment Bank | Askari Bank vs. AKD Hospitality | Askari Bank vs. Pakistan Telecommunication |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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