Correlation Between ITTEFAQ Iron and Aisha Steel
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By analyzing existing cross correlation between ITTEFAQ Iron Industries and Aisha Steel Mills, you can compare the effects of market volatilities on ITTEFAQ Iron and Aisha Steel 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 ITTEFAQ Iron with a short position of Aisha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITTEFAQ Iron and Aisha Steel.
Diversification Opportunities for ITTEFAQ Iron and Aisha Steel
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ITTEFAQ and Aisha is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ITTEFAQ Iron Industries and Aisha Steel Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aisha Steel Mills and ITTEFAQ Iron 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 ITTEFAQ Iron Industries are associated (or correlated) with Aisha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aisha Steel Mills has no effect on the direction of ITTEFAQ Iron i.e., ITTEFAQ Iron and Aisha Steel go up and down completely randomly.
Pair Corralation between ITTEFAQ Iron and Aisha Steel
Assuming the 90 days trading horizon ITTEFAQ Iron Industries is expected to generate 1.21 times more return on investment than Aisha Steel. However, ITTEFAQ Iron is 1.21 times more volatile than Aisha Steel Mills. It trades about 0.02 of its potential returns per unit of risk. Aisha Steel Mills is currently generating about 0.01 per unit of risk. If you would invest 597.00 in ITTEFAQ Iron Industries on August 30, 2024 and sell it today you would earn a total of 28.00 from holding ITTEFAQ Iron Industries or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
ITTEFAQ Iron Industries vs. Aisha Steel Mills
Performance |
| Timeline |
| ITTEFAQ Iron Industries |
| Aisha Steel Mills |
ITTEFAQ Iron and Aisha Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITTEFAQ Iron and Aisha Steel
The main advantage of trading using opposite ITTEFAQ Iron and Aisha Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITTEFAQ Iron position performs unexpectedly, Aisha Steel 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 Aisha Steel will offset losses from the drop in Aisha Steel's long position.| ITTEFAQ Iron vs. Oil and Gas | ITTEFAQ Iron vs. Pakistan State Oil | ITTEFAQ Iron vs. Pakistan Petroleum | ITTEFAQ Iron vs. Fauji Fertilizer |
| Aisha Steel vs. TPL Insurance | Aisha Steel vs. Silkbank | Aisha Steel vs. Adamjee Insurance | Aisha Steel vs. Agritech |
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 Correlations module to find global opportunities by holding instruments from different markets.
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