Correlation Between Hi Tech and Agha Steel
Can any of the company-specific risk be diversified away by investing in both Hi Tech and Agha Steel 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 Hi Tech and Agha Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Tech Lubricants and Agha Steel Industries, you can compare the effects of market volatilities on Hi Tech and Agha Steel 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 Hi Tech with a short position of Agha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Tech and Agha Steel.
Diversification Opportunities for Hi Tech and Agha Steel
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HTL and Agha is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hi Tech Lubricants and Agha Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agha Steel Industries and Hi Tech 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 Hi Tech Lubricants are associated (or correlated) with Agha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agha Steel Industries has no effect on the direction of Hi Tech i.e., Hi Tech and Agha Steel go up and down completely randomly.
Pair Corralation between Hi Tech and Agha Steel
Assuming the 90 days trading horizon Hi Tech Lubricants is expected to generate 1.02 times more return on investment than Agha Steel. However, Hi Tech is 1.02 times more volatile than Agha Steel Industries. It trades about 0.13 of its potential returns per unit of risk. Agha Steel Industries is currently generating about -0.36 per unit of risk. If you would invest 3,910 in Hi Tech Lubricants on August 27, 2024 and sell it today you would earn a total of 323.00 from holding Hi Tech Lubricants or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Tech Lubricants vs. Agha Steel Industries
Performance |
| Timeline |
| Hi Tech Lubricants |
| Agha Steel Industries |
Hi Tech and Agha Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Tech and Agha Steel
The main advantage of trading using opposite Hi Tech and Agha Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Tech position performs unexpectedly, Agha Steel 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 Agha Steel will offset losses from the drop in Agha Steel's long position.| Hi Tech vs. Al Ghazi Tractors | Hi Tech vs. Shell Pakistan | Hi Tech vs. Nestle Pakistan | Hi Tech vs. Hinopak Motors |
| Agha Steel vs. Habib Insurance | Agha Steel vs. Century Insurance | Agha Steel vs. Reliance Weaving Mills | Agha Steel vs. Media Times |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |