Correlation Between Invest Capital and Allied Bank
Can any of the company-specific risk be diversified away by investing in both Invest Capital and Allied Bank 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 Invest Capital and Allied Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invest Capital Investment and Allied Bank, you can compare the effects of market volatilities on Invest Capital and Allied Bank 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 Invest Capital with a short position of Allied Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invest Capital and Allied Bank.
Diversification Opportunities for Invest Capital and Allied Bank
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invest and Allied is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Invest Capital Investment and Allied Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Bank and Invest Capital 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 Invest Capital Investment are associated (or correlated) with Allied Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Bank has no effect on the direction of Invest Capital i.e., Invest Capital and Allied Bank go up and down completely randomly.
Pair Corralation between Invest Capital and Allied Bank
Assuming the 90 days trading horizon Invest Capital Investment is expected to under-perform the Allied Bank. In addition to that, Invest Capital is 2.43 times more volatile than Allied Bank. It trades about -0.18 of its total potential returns per unit of risk. Allied Bank is currently generating about 0.18 per unit of volatility. If you would invest 13,732 in Allied Bank on November 3, 2024 and sell it today you would earn a total of 617.00 from holding Allied Bank or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invest Capital Investment vs. Allied Bank
Performance |
| Timeline |
| Invest Capital Investment |
| Allied Bank |
Invest Capital and Allied Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invest Capital and Allied Bank
The main advantage of trading using opposite Invest Capital and Allied Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invest Capital position performs unexpectedly, Allied Bank 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 Allied Bank will offset losses from the drop in Allied Bank's long position.| Invest Capital vs. United Insurance | Invest Capital vs. Agha Steel Industries | Invest Capital vs. NetSol Technologies | Invest Capital vs. Metropolitan Steel Corp |
| Allied Bank vs. IGI Life Insurance | Allied Bank vs. Fauji Foods | Allied Bank vs. Roshan Packages | Allied Bank vs. Pakistan Tobacco |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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