Correlation Between Habib Insurance and Orient Rental
Can any of the company-specific risk be diversified away by investing in both Habib Insurance and Orient Rental 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 Orient Rental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Habib Insurance and Orient Rental Modaraba, you can compare the effects of market volatilities on Habib Insurance and Orient Rental 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 Orient Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and Orient Rental.
Diversification Opportunities for Habib Insurance and Orient Rental
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Habib and Orient is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and Orient Rental Modaraba in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Rental Modaraba 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 Orient Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Rental Modaraba has no effect on the direction of Habib Insurance i.e., Habib Insurance and Orient Rental go up and down completely randomly.
Pair Corralation between Habib Insurance and Orient Rental
Assuming the 90 days trading horizon Habib Insurance is expected to generate 1.37 times more return on investment than Orient Rental. However, Habib Insurance is 1.37 times more volatile than Orient Rental Modaraba. It trades about 0.07 of its potential returns per unit of risk. Orient Rental Modaraba is currently generating about 0.08 per unit of risk. If you would invest 494.00 in Habib Insurance on August 27, 2024 and sell it today you would earn a total of 206.00 from holding Habib Insurance or generate 41.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.22% |
| Values | Daily Returns |
Habib Insurance vs. Orient Rental Modaraba
Performance |
| Timeline |
| Habib Insurance |
| Orient Rental Modaraba |
Habib Insurance and Orient Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and Orient Rental
The main advantage of trading using opposite Habib Insurance and Orient Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance position performs unexpectedly, Orient Rental 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 Orient Rental will offset losses from the drop in Orient Rental's long position.| Habib Insurance vs. Habib Bank | Habib Insurance vs. National Bank of | Habib Insurance vs. United Bank | Habib Insurance vs. MCB Bank |
| Orient Rental vs. Masood Textile Mills | Orient Rental vs. Fauji Foods | Orient Rental vs. KSB Pumps | Orient Rental vs. Mari Petroleum |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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