Correlation Between Habib Insurance and Al Khair
Can any of the company-specific risk be diversified away by investing in both Habib Insurance and Al Khair 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 Al Khair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Habib Insurance and Al Khair Gadoon Limited, you can compare the effects of market volatilities on Habib Insurance and Al Khair 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 Al Khair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and Al Khair.
Diversification Opportunities for Habib Insurance and Al Khair
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Habib and AKGL is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and Al Khair Gadoon Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Khair Gadoon 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 Al Khair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Khair Gadoon has no effect on the direction of Habib Insurance i.e., Habib Insurance and Al Khair go up and down completely randomly.
Pair Corralation between Habib Insurance and Al Khair
Assuming the 90 days trading horizon Habib Insurance is expected to generate 1.47 times less return on investment than Al Khair. But when comparing it to its historical volatility, Habib Insurance is 1.56 times less risky than Al Khair. It trades about 0.32 of its potential returns per unit of risk. Al Khair Gadoon Limited is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,400 in Al Khair Gadoon Limited on September 4, 2024 and sell it today you would earn a total of 400.00 from holding Al Khair Gadoon Limited or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 38.1% |
| Values | Daily Returns |
Habib Insurance vs. Al Khair Gadoon Limited
Performance |
| Timeline |
| Habib Insurance |
| Al Khair Gadoon |
Habib Insurance and Al Khair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and Al Khair
The main advantage of trading using opposite Habib Insurance and Al Khair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance position performs unexpectedly, Al Khair 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 Al Khair will offset losses from the drop in Al Khair'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 |
| Al Khair vs. Habib Insurance | Al Khair vs. Pakistan Refinery | Al Khair vs. Century Insurance | Al Khair 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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