Correlation Between Habib Insurance and Premier Insurance
Can any of the company-specific risk be diversified away by investing in both Habib Insurance and Premier Insurance 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 Premier Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Habib Insurance and Premier Insurance, you can compare the effects of market volatilities on Habib Insurance and Premier Insurance 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 Premier Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and Premier Insurance.
Diversification Opportunities for Habib Insurance and Premier Insurance
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Habib and Premier is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and Premier Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Insurance 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 Premier Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Insurance has no effect on the direction of Habib Insurance i.e., Habib Insurance and Premier Insurance go up and down completely randomly.
Pair Corralation between Habib Insurance and Premier Insurance
Assuming the 90 days trading horizon Habib Insurance is expected to generate 1.32 times less return on investment than Premier Insurance. But when comparing it to its historical volatility, Habib Insurance is 1.68 times less risky than Premier Insurance. It trades about 0.04 of its potential returns per unit of risk. Premier Insurance is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Premier Insurance on August 30, 2024 and sell it today you would lose (90.00) from holding Premier Insurance or give up 13.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.01% |
| Values | Daily Returns |
Habib Insurance vs. Premier Insurance
Performance |
| Timeline |
| Habib Insurance |
| Premier Insurance |
Habib Insurance and Premier Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and Premier Insurance
The main advantage of trading using opposite Habib Insurance and Premier Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance position performs unexpectedly, Premier Insurance 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 Premier Insurance will offset losses from the drop in Premier Insurance's long position.| Habib Insurance vs. Masood Textile Mills | Habib Insurance vs. Fauji Foods | Habib Insurance vs. KSB Pumps | Habib Insurance vs. Mari Petroleum |
| Premier Insurance vs. Masood Textile Mills | Premier Insurance vs. Fauji Foods | Premier Insurance vs. KSB Pumps | Premier Insurance 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |