Correlation Between Habib Metropolitan and Invest Capital
Can any of the company-specific risk be diversified away by investing in both Habib Metropolitan and Invest Capital 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 Invest Capital 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 Invest Capital Investment, you can compare the effects of market volatilities on Habib Metropolitan and Invest Capital 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 Invest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habib Metropolitan and Invest Capital.
Diversification Opportunities for Habib Metropolitan and Invest Capital
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Habib and Invest is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Habib Metropolitan Bank and Invest Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invest Capital Investment 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 Invest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invest Capital Investment has no effect on the direction of Habib Metropolitan i.e., Habib Metropolitan and Invest Capital go up and down completely randomly.
Pair Corralation between Habib Metropolitan and Invest Capital
Assuming the 90 days trading horizon Habib Metropolitan Bank is expected to generate 0.33 times more return on investment than Invest Capital. However, Habib Metropolitan Bank is 3.06 times less risky than Invest Capital. It trades about 0.15 of its potential returns per unit of risk. Invest Capital Investment is currently generating about 0.04 per unit of risk. If you would invest 4,800 in Habib Metropolitan Bank on September 4, 2024 and sell it today you would earn a total of 4,173 from holding Habib Metropolitan Bank or generate 86.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Habib Metropolitan Bank vs. Invest Capital Investment
Performance |
| Timeline |
| Habib Metropolitan Bank |
| Invest Capital Investment |
Habib Metropolitan and Invest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Habib Metropolitan and Invest Capital
The main advantage of trading using opposite Habib Metropolitan and Invest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habib Metropolitan position performs unexpectedly, Invest Capital 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 Invest Capital will offset losses from the drop in Invest Capital's long position.| Habib Metropolitan vs. Invest Capital Investment | Habib Metropolitan vs. Unilever Pakistan Foods | Habib Metropolitan vs. MCB Investment Manag | Habib Metropolitan vs. Air Link Communication |
| Invest Capital vs. East West Insurance | Invest Capital vs. Mughal Iron Steel | Invest Capital vs. Beco Steel | Invest Capital vs. Askari General 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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