Correlation Between Habib Insurance and MCB Investment
Can any of the company-specific risk be diversified away by investing in both Habib Insurance and MCB Investment 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 MCB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Habib Insurance and MCB Investment Manag, you can compare the effects of market volatilities on Habib Insurance and MCB Investment 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 MCB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and MCB Investment.
Diversification Opportunities for Habib Insurance and MCB Investment
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Habib and MCB is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and MCB Investment Manag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCB Investment Manag 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 MCB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCB Investment Manag has no effect on the direction of Habib Insurance i.e., Habib Insurance and MCB Investment go up and down completely randomly.
Pair Corralation between Habib Insurance and MCB Investment
Assuming the 90 days trading horizon Habib Insurance is expected to generate 4.75 times less return on investment than MCB Investment. In addition to that, Habib Insurance is 1.07 times more volatile than MCB Investment Manag. It trades about 0.08 of its total potential returns per unit of risk. MCB Investment Manag is currently generating about 0.39 per unit of volatility. If you would invest 3,913 in MCB Investment Manag on August 29, 2024 and sell it today you would earn a total of 1,196 from holding MCB Investment Manag or generate 30.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Habib Insurance vs. MCB Investment Manag
Performance |
| Timeline |
| Habib Insurance |
| MCB Investment Manag |
Habib Insurance and MCB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and MCB Investment
The main advantage of trading using opposite Habib Insurance and MCB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance position performs unexpectedly, MCB Investment 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 MCB Investment will offset losses from the drop in MCB Investment's long position.| Habib Insurance vs. Habib Bank | Habib Insurance vs. National Bank of | Habib Insurance vs. United Bank | Habib Insurance vs. MCB Bank |
| MCB Investment vs. Habib Insurance | MCB Investment vs. Century Insurance | MCB Investment vs. Reliance Weaving Mills | MCB Investment vs. Media Times |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |