Correlation Between Hub Power and Pakistan Oilfields
Can any of the company-specific risk be diversified away by investing in both Hub Power and Pakistan Oilfields 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 Pakistan Oilfields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hub Power and Pakistan Oilfields, you can compare the effects of market volatilities on Hub Power and Pakistan Oilfields 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 Pakistan Oilfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hub Power and Pakistan Oilfields.
Diversification Opportunities for Hub Power and Pakistan Oilfields
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hub and Pakistan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hub Power and Pakistan Oilfields in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Oilfields 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 Pakistan Oilfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Oilfields has no effect on the direction of Hub Power i.e., Hub Power and Pakistan Oilfields go up and down completely randomly.
Pair Corralation between Hub Power and Pakistan Oilfields
Assuming the 90 days trading horizon Hub Power is expected to under-perform the Pakistan Oilfields. In addition to that, Hub Power is 1.95 times more volatile than Pakistan Oilfields. It trades about -0.01 of its total potential returns per unit of risk. Pakistan Oilfields is currently generating about 0.08 per unit of volatility. If you would invest 63,560 in Pakistan Oilfields on November 4, 2024 and sell it today you would earn a total of 945.00 from holding Pakistan Oilfields or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hub Power vs. Pakistan Oilfields
Performance |
| Timeline |
| Hub Power |
| Pakistan Oilfields |
Hub Power and Pakistan Oilfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hub Power and Pakistan Oilfields
The main advantage of trading using opposite Hub Power and Pakistan Oilfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hub Power position performs unexpectedly, Pakistan Oilfields 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 Pakistan Oilfields will offset losses from the drop in Pakistan Oilfields' long position.| Hub Power vs. Jubilee Life Insurance | Hub Power vs. East West Insurance | Hub Power vs. Shaheen Insurance | Hub Power vs. Premier Insurance |
| Pakistan Oilfields vs. IGI Life Insurance | Pakistan Oilfields vs. Pak Datacom | Pakistan Oilfields vs. Nimir Industrial Chemical | Pakistan Oilfields vs. Shaheen 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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