Correlation Between Habib Insurance and Attock Petroleum
Can any of the company-specific risk be diversified away by investing in both Habib Insurance 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 Insurance 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 Insurance and Attock Petroleum, you can compare the effects of market volatilities on Habib Insurance 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 Insurance with a short position of Attock Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and Attock Petroleum.
Diversification Opportunities for Habib Insurance and Attock Petroleum
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Habib and Attock is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and Attock Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Attock Petroleum 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 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 Insurance i.e., Habib Insurance and Attock Petroleum go up and down completely randomly.
Pair Corralation between Habib Insurance and Attock Petroleum
Assuming the 90 days trading horizon Habib Insurance is expected to generate 2.27 times more return on investment than Attock Petroleum. However, Habib Insurance is 2.27 times more volatile than Attock Petroleum. It trades about 0.07 of its potential returns per unit of risk. Attock Petroleum is currently generating about 0.08 per unit of risk. If you would invest 472.00 in Habib Insurance on December 4, 2024 and sell it today you would earn a total of 448.00 from holding Habib Insurance or generate 94.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.66% |
| Values | Daily Returns |
Habib Insurance vs. Attock Petroleum
Performance |
| Timeline |
| Habib Insurance |
| Attock Petroleum |
Habib Insurance and Attock Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and Attock Petroleum
The main advantage of trading using opposite Habib Insurance and Attock Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance 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 Insurance vs. Pakistan Aluminium Beverage | Habib Insurance vs. Air Link Communication | Habib Insurance vs. The Organic Meat | Habib Insurance vs. National Foods |
| Attock Petroleum vs. Askari Bank | Attock Petroleum vs. Meezan Bank | Attock Petroleum vs. IGI Life Insurance | Attock Petroleum vs. Silkbank |
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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