Correlation Between Habib Insurance and BRR Guardian
Can any of the company-specific risk be diversified away by investing in both Habib Insurance and BRR Guardian 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 BRR Guardian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Habib Insurance and BRR Guardian, you can compare the effects of market volatilities on Habib Insurance and BRR Guardian 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 BRR Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and BRR Guardian.
Diversification Opportunities for Habib Insurance and BRR Guardian
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Habib and BRR is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and BRR Guardian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRR Guardian 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 BRR Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRR Guardian has no effect on the direction of Habib Insurance i.e., Habib Insurance and BRR Guardian go up and down completely randomly.
Pair Corralation between Habib Insurance and BRR Guardian
Assuming the 90 days trading horizon Habib Insurance is expected to generate 4.03 times less return on investment than BRR Guardian. But when comparing it to its historical volatility, Habib Insurance is 1.07 times less risky than BRR Guardian. It trades about 0.01 of its potential returns per unit of risk. BRR Guardian is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,404 in BRR Guardian on September 3, 2024 and sell it today you would earn a total of 137.00 from holding BRR Guardian or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Habib Insurance vs. BRR Guardian
Performance |
| Timeline |
| Habib Insurance |
| BRR Guardian |
Habib Insurance and BRR Guardian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and BRR Guardian
The main advantage of trading using opposite Habib Insurance and BRR Guardian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance position performs unexpectedly, BRR Guardian 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 BRR Guardian will offset losses from the drop in BRR Guardian's long position.| Habib Insurance vs. Aisha Steel Mills | Habib Insurance vs. Dost Steels | Habib Insurance vs. Pakistan Telecommunication | Habib Insurance vs. East West Insurance |
| BRR Guardian vs. Data Agro | BRR Guardian vs. Sardar Chemical Industries | BRR Guardian vs. Security Investment Bank | BRR Guardian vs. MCB Investment Manag |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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