Correlation Between International Steels and Khalid Siraj
Can any of the company-specific risk be diversified away by investing in both International Steels and Khalid Siraj 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 International Steels and Khalid Siraj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Steels and Khalid Siraj Textile, you can compare the effects of market volatilities on International Steels and Khalid Siraj 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 International Steels with a short position of Khalid Siraj. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Steels and Khalid Siraj.
Diversification Opportunities for International Steels and Khalid Siraj
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between International and Khalid is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding International Steels and Khalid Siraj Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khalid Siraj Textile and International Steels 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 International Steels are associated (or correlated) with Khalid Siraj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khalid Siraj Textile has no effect on the direction of International Steels i.e., International Steels and Khalid Siraj go up and down completely randomly.
Pair Corralation between International Steels and Khalid Siraj
Assuming the 90 days trading horizon International Steels is expected to generate 1.81 times less return on investment than Khalid Siraj. But when comparing it to its historical volatility, International Steels is 2.44 times less risky than Khalid Siraj. It trades about 0.1 of its potential returns per unit of risk. Khalid Siraj Textile is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 813.00 in Khalid Siraj Textile on September 12, 2024 and sell it today you would earn a total of 162.00 from holding Khalid Siraj Textile or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Steels vs. Khalid Siraj Textile
Performance |
| Timeline |
| International Steels |
| Khalid Siraj Textile |
International Steels and Khalid Siraj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Steels and Khalid Siraj
The main advantage of trading using opposite International Steels and Khalid Siraj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Steels position performs unexpectedly, Khalid Siraj 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 Khalid Siraj will offset losses from the drop in Khalid Siraj's long position.| International Steels vs. Masood Textile Mills | International Steels vs. Fauji Foods | International Steels vs. KSB Pumps | International Steels vs. Mari Petroleum |
| Khalid Siraj vs. Quice Food Industries | Khalid Siraj vs. International Steels | Khalid Siraj vs. Unity Foods | Khalid Siraj vs. National Foods |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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