Correlation Between Habib Insurance and Shifa International
Can any of the company-specific risk be diversified away by investing in both Habib Insurance and Shifa International 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 Shifa International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Habib Insurance and Shifa International Hospitals, you can compare the effects of market volatilities on Habib Insurance and Shifa International 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 Shifa International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and Shifa International.
Diversification Opportunities for Habib Insurance and Shifa International
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Habib and Shifa is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and Shifa International Hospitals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shifa International 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 Shifa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shifa International has no effect on the direction of Habib Insurance i.e., Habib Insurance and Shifa International go up and down completely randomly.
Pair Corralation between Habib Insurance and Shifa International
Assuming the 90 days trading horizon Habib Insurance is expected to generate 4.6 times less return on investment than Shifa International. In addition to that, Habib Insurance is 1.32 times more volatile than Shifa International Hospitals. It trades about 0.03 of its total potential returns per unit of risk. Shifa International Hospitals is currently generating about 0.2 per unit of volatility. If you would invest 13,382 in Shifa International Hospitals on August 28, 2024 and sell it today you would earn a total of 25,497 from holding Shifa International Hospitals or generate 190.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.56% |
| Values | Daily Returns |
Habib Insurance vs. Shifa International Hospitals
Performance |
| Timeline |
| Habib Insurance |
| Shifa International |
Habib Insurance and Shifa International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and Shifa International
The main advantage of trading using opposite Habib Insurance and Shifa International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance position performs unexpectedly, Shifa International 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 Shifa International will offset losses from the drop in Shifa International's long position.| Habib Insurance vs. Habib Bank | Habib Insurance vs. National Bank of | Habib Insurance vs. United Bank | Habib Insurance vs. MCB Bank |
| Shifa International vs. Bank of Punjab | Shifa International vs. IBL HealthCare | Shifa International vs. EFU General Insurance | Shifa International vs. Shaheen Insurance |
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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