Correlation Between IBL HealthCare and Masood Textile
Can any of the company-specific risk be diversified away by investing in both IBL HealthCare and Masood Textile 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 Masood Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBL HealthCare and Masood Textile Mills, you can compare the effects of market volatilities on IBL HealthCare and Masood Textile 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 Masood Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBL HealthCare and Masood Textile.
Diversification Opportunities for IBL HealthCare and Masood Textile
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IBL and Masood is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding IBL HealthCare and Masood Textile Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masood Textile Mills 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 Masood Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masood Textile Mills has no effect on the direction of IBL HealthCare i.e., IBL HealthCare and Masood Textile go up and down completely randomly.
Pair Corralation between IBL HealthCare and Masood Textile
Assuming the 90 days trading horizon IBL HealthCare is expected to generate 1.32 times more return on investment than Masood Textile. However, IBL HealthCare is 1.32 times more volatile than Masood Textile Mills. It trades about 0.32 of its potential returns per unit of risk. Masood Textile Mills is currently generating about 0.26 per unit of risk. If you would invest 2,912 in IBL HealthCare on August 31, 2024 and sell it today you would earn a total of 995.00 from holding IBL HealthCare or generate 34.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
IBL HealthCare vs. Masood Textile Mills
Performance |
| Timeline |
| IBL HealthCare |
| Masood Textile Mills |
IBL HealthCare and Masood Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBL HealthCare and Masood Textile
The main advantage of trading using opposite IBL HealthCare and Masood Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBL HealthCare position performs unexpectedly, Masood Textile 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 Masood Textile will offset losses from the drop in Masood Textile'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 |
| Masood Textile vs. Fauji Foods | Masood Textile vs. KSB Pumps | Masood Textile vs. Mari Petroleum | Masood Textile vs. Loads |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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