Correlation Between IBL HealthCare and Apna Microfinance
Can any of the company-specific risk be diversified away by investing in both IBL HealthCare and Apna Microfinance 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 IBL HealthCare and Apna Microfinance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBL HealthCare and Apna Microfinance Bank, you can compare the effects of market volatilities on IBL HealthCare and Apna Microfinance 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 IBL HealthCare with a short position of Apna Microfinance. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBL HealthCare and Apna Microfinance.
Diversification Opportunities for IBL HealthCare and Apna Microfinance
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between IBL and Apna is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding IBL HealthCare and Apna Microfinance Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apna Microfinance Bank and IBL HealthCare 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 IBL HealthCare are associated (or correlated) with Apna Microfinance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apna Microfinance Bank has no effect on the direction of IBL HealthCare i.e., IBL HealthCare and Apna Microfinance go up and down completely randomly.
Pair Corralation between IBL HealthCare and Apna Microfinance
Assuming the 90 days trading horizon IBL HealthCare is expected to generate 0.79 times more return on investment than Apna Microfinance. However, IBL HealthCare is 1.27 times less risky than Apna Microfinance. It trades about 0.05 of its potential returns per unit of risk. Apna Microfinance Bank is currently generating about -0.18 per unit of risk. If you would invest 2,642 in IBL HealthCare on August 31, 2024 and sell it today you would earn a total of 1,265 from holding IBL HealthCare or generate 47.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 20.0% |
| Values | Daily Returns |
IBL HealthCare vs. Apna Microfinance Bank
Performance |
| Timeline |
| IBL HealthCare |
| Apna Microfinance Bank |
IBL HealthCare and Apna Microfinance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBL HealthCare and Apna Microfinance
The main advantage of trading using opposite IBL HealthCare and Apna Microfinance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBL HealthCare position performs unexpectedly, Apna Microfinance 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 Apna Microfinance will offset losses from the drop in Apna Microfinance's long position.| IBL HealthCare vs. 786 Investment Limited | IBL HealthCare vs. Sindh Modaraba Management | IBL HealthCare vs. Air Link Communication | IBL HealthCare vs. AKD Hospitality |
| Apna Microfinance vs. Habib Insurance | Apna Microfinance vs. Century Insurance | Apna Microfinance vs. Reliance Weaving Mills | Apna Microfinance 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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