Correlation Between Habib Metropolitan and Big Bird
Can any of the company-specific risk be diversified away by investing in both Habib Metropolitan and Big Bird 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 Metropolitan and Big Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Habib Metropolitan Bank and Big Bird Foods, you can compare the effects of market volatilities on Habib Metropolitan and Big Bird 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 Metropolitan with a short position of Big Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Metropolitan and Big Bird.
Diversification Opportunities for Habib Metropolitan and Big Bird
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Habib and Big is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Habib Metropolitan Bank and Big Bird Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Bird Foods and Habib Metropolitan 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 Metropolitan Bank are associated (or correlated) with Big Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Bird Foods has no effect on the direction of Habib Metropolitan i.e., Habib Metropolitan and Big Bird go up and down completely randomly.
Pair Corralation between Habib Metropolitan and Big Bird
Assuming the 90 days trading horizon Habib Metropolitan Bank is expected to generate 0.98 times more return on investment than Big Bird. However, Habib Metropolitan Bank is 1.02 times less risky than Big Bird. It trades about 0.26 of its potential returns per unit of risk. Big Bird Foods is currently generating about -0.33 per unit of risk. If you would invest 7,211 in Habib Metropolitan Bank on September 13, 2024 and sell it today you would earn a total of 1,347 from holding Habib Metropolitan Bank or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Habib Metropolitan Bank vs. Big Bird Foods
Performance |
| Timeline |
| Habib Metropolitan Bank |
| Big Bird Foods |
Habib Metropolitan and Big Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Metropolitan and Big Bird
The main advantage of trading using opposite Habib Metropolitan and Big Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Metropolitan position performs unexpectedly, Big Bird 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 Big Bird will offset losses from the drop in Big Bird's long position.| Habib Metropolitan vs. Big Bird Foods | Habib Metropolitan vs. Pakistan Telecommunication | Habib Metropolitan vs. Reliance Insurance Co | Habib Metropolitan vs. Ghandhara Automobile |
| Big Bird vs. Habib Insurance | Big Bird vs. Ghandhara Automobile | Big Bird vs. Century Insurance | Big Bird vs. Reliance Weaving Mills |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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