Correlation Between International Steels and Security Investment
Can any of the company-specific risk be diversified away by investing in both International Steels and Security Investment 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 Security Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Steels and Security Investment Bank, you can compare the effects of market volatilities on International Steels and Security Investment 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 Security Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Steels and Security Investment.
Diversification Opportunities for International Steels and Security Investment
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Security is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding International Steels and Security Investment Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Investment Bank 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 Security Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Investment Bank has no effect on the direction of International Steels i.e., International Steels and Security Investment go up and down completely randomly.
Pair Corralation between International Steels and Security Investment
Assuming the 90 days trading horizon International Steels is expected to generate 0.59 times more return on investment than Security Investment. However, International Steels is 1.69 times less risky than Security Investment. It trades about 0.16 of its potential returns per unit of risk. Security Investment Bank is currently generating about 0.01 per unit of risk. If you would invest 6,961 in International Steels on September 2, 2024 and sell it today you would earn a total of 538.00 from holding International Steels or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
International Steels vs. Security Investment Bank
Performance |
| Timeline |
| International Steels |
| Security Investment Bank |
International Steels and Security Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Steels and Security Investment
The main advantage of trading using opposite International Steels and Security Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Steels position performs unexpectedly, Security Investment 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 Security Investment will offset losses from the drop in Security Investment's long position.| International Steels vs. JS Investments | International Steels vs. MCB Bank | International Steels vs. National Foods | International Steels vs. Unity Foods |
| Security Investment vs. Pakistan Telecommunication | Security Investment vs. Dost Steels | Security Investment vs. Khyber Tobacco | Security Investment vs. Synthetic Products Enterprises |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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