Correlation Between Habib Insurance and United Insurance
Can any of the company-specific risk be diversified away by investing in both Habib Insurance and United 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 United 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 United Insurance, you can compare the effects of market volatilities on Habib Insurance and United 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 United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Insurance and United Insurance.
Diversification Opportunities for Habib Insurance and United Insurance
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Habib and United is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Habib Insurance and United Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United 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 United Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Insurance has no effect on the direction of Habib Insurance i.e., Habib Insurance and United Insurance go up and down completely randomly.
Pair Corralation between Habib Insurance and United Insurance
Assuming the 90 days trading horizon Habib Insurance is expected to generate 2.81 times more return on investment than United Insurance. However, Habib Insurance is 2.81 times more volatile than United Insurance. It trades about 0.08 of its potential returns per unit of risk. United Insurance is currently generating about -0.23 per unit of risk. If you would invest 672.00 in Habib Insurance on August 26, 2024 and sell it today you would earn a total of 28.00 from holding Habib Insurance or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Habib Insurance vs. United Insurance
Performance |
| Timeline |
| Habib Insurance |
| United Insurance |
Habib Insurance and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Insurance and United Insurance
The main advantage of trading using opposite Habib Insurance and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Insurance position performs unexpectedly, United 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 United Insurance will offset losses from the drop in United Insurance's long position.| Habib Insurance vs. Habib Bank | Habib Insurance vs. National Bank of | Habib Insurance vs. United Bank | Habib Insurance vs. MCB Bank |
| United Insurance vs. Habib Bank | United Insurance vs. National Bank of | United Insurance vs. United Bank | United Insurance vs. MCB Bank |
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.
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