Correlation Between Hub Power and Lucky Cement
Can any of the company-specific risk be diversified away by investing in both Hub Power and Lucky Cement 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 Hub Power and Lucky Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hub Power and Lucky Cement, you can compare the effects of market volatilities on Hub Power and Lucky Cement 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 Hub Power with a short position of Lucky Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hub Power and Lucky Cement.
Diversification Opportunities for Hub Power and Lucky Cement
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hub and Lucky is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hub Power and Lucky Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucky Cement and Hub Power 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 Hub Power are associated (or correlated) with Lucky Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucky Cement has no effect on the direction of Hub Power i.e., Hub Power and Lucky Cement go up and down completely randomly.
Pair Corralation between Hub Power and Lucky Cement
Assuming the 90 days trading horizon Hub Power is expected to generate 1.07 times less return on investment than Lucky Cement. In addition to that, Hub Power is 1.28 times more volatile than Lucky Cement. It trades about 0.1 of its total potential returns per unit of risk. Lucky Cement is currently generating about 0.13 per unit of volatility. If you would invest 51,594 in Lucky Cement on August 28, 2024 and sell it today you would earn a total of 48,284 from holding Lucky Cement or generate 93.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hub Power vs. Lucky Cement
Performance |
| Timeline |
| Hub Power |
| Lucky Cement |
Hub Power and Lucky Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hub Power and Lucky Cement
The main advantage of trading using opposite Hub Power and Lucky Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hub Power position performs unexpectedly, Lucky Cement 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 Lucky Cement will offset losses from the drop in Lucky Cement's long position.| Hub Power vs. Pakistan State Oil | Hub Power vs. Oil and Gas | Hub Power vs. Lucky Cement | Hub Power vs. Engro |
| Lucky Cement vs. Ghandhara Automobile | Lucky Cement vs. MCB Investment Manag | Lucky Cement vs. Escorts Investment Bank | Lucky Cement vs. Habib 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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