Correlation Between IGI Life and Habib Metropolitan
Can any of the company-specific risk be diversified away by investing in both IGI Life and Habib Metropolitan 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 IGI Life and Habib Metropolitan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGI Life Insurance and Habib Metropolitan Bank, you can compare the effects of market volatilities on IGI Life and Habib Metropolitan 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 IGI Life with a short position of Habib Metropolitan. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGI Life and Habib Metropolitan.
Diversification Opportunities for IGI Life and Habib Metropolitan
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IGI and Habib is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding IGI Life Insurance and Habib Metropolitan Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Metropolitan Bank and IGI Life 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 IGI Life Insurance are associated (or correlated) with Habib Metropolitan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Metropolitan Bank has no effect on the direction of IGI Life i.e., IGI Life and Habib Metropolitan go up and down completely randomly.
Pair Corralation between IGI Life and Habib Metropolitan
Assuming the 90 days trading horizon IGI Life Insurance is expected to under-perform the Habib Metropolitan. In addition to that, IGI Life is 1.03 times more volatile than Habib Metropolitan Bank. It trades about -0.07 of its total potential returns per unit of risk. Habib Metropolitan Bank is currently generating about 0.26 per unit of volatility. If you would invest 8,300 in Habib Metropolitan Bank on October 25, 2024 and sell it today you would earn a total of 1,439 from holding Habib Metropolitan Bank or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
IGI Life Insurance vs. Habib Metropolitan Bank
Performance |
| Timeline |
| IGI Life Insurance |
| Habib Metropolitan Bank |
IGI Life and Habib Metropolitan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGI Life and Habib Metropolitan
The main advantage of trading using opposite IGI Life and Habib Metropolitan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGI Life position performs unexpectedly, Habib Metropolitan 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 Habib Metropolitan will offset losses from the drop in Habib Metropolitan's long position.| IGI Life vs. TPL Insurance | IGI Life vs. Engro Polymer Chemicals | IGI Life vs. Sardar Chemical Industries | IGI Life vs. Sitara Chemical Industries |
| Habib Metropolitan vs. IGI Life Insurance | Habib Metropolitan vs. EFU General Insurance | Habib Metropolitan vs. Shaheen Insurance | Habib Metropolitan vs. Invest Capital Investment |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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