Correlation Between IBL HealthCare and Atlas Battery
Can any of the company-specific risk be diversified away by investing in both IBL HealthCare and Atlas Battery 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 Atlas Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBL HealthCare and Atlas Battery, you can compare the effects of market volatilities on IBL HealthCare and Atlas Battery 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 Atlas Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBL HealthCare and Atlas Battery.
Diversification Opportunities for IBL HealthCare and Atlas Battery
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IBL and Atlas is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding IBL HealthCare and Atlas Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Battery 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 Atlas Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Battery has no effect on the direction of IBL HealthCare i.e., IBL HealthCare and Atlas Battery go up and down completely randomly.
Pair Corralation between IBL HealthCare and Atlas Battery
Assuming the 90 days trading horizon IBL HealthCare is expected to generate 2.45 times more return on investment than Atlas Battery. However, IBL HealthCare is 2.45 times more volatile than Atlas Battery. It trades about 0.31 of its potential returns per unit of risk. Atlas Battery is currently generating about 0.14 per unit of risk. If you would invest 3,440 in IBL HealthCare on September 12, 2024 and sell it today you would earn a total of 1,269 from holding IBL HealthCare or generate 36.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBL HealthCare vs. Atlas Battery
Performance |
| Timeline |
| IBL HealthCare |
| Atlas Battery |
IBL HealthCare and Atlas Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBL HealthCare and Atlas Battery
The main advantage of trading using opposite IBL HealthCare and Atlas Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBL HealthCare position performs unexpectedly, Atlas Battery 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 Atlas Battery will offset losses from the drop in Atlas Battery's long position.| IBL HealthCare vs. Masood Textile Mills | IBL HealthCare vs. Fauji Foods | IBL HealthCare vs. KSB Pumps | IBL HealthCare vs. Mari Petroleum |
| Atlas Battery vs. Shaheen Insurance | Atlas Battery vs. Allied Bank | Atlas Battery vs. Pak Gulf Leasing | Atlas Battery vs. Atlas 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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