Correlation Between ITTEFAQ Iron and Crescent Steel
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By analyzing existing cross correlation between ITTEFAQ Iron Industries and Crescent Steel Allied, you can compare the effects of market volatilities on ITTEFAQ Iron and Crescent 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 Crescent Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITTEFAQ Iron and Crescent Steel.
Diversification Opportunities for ITTEFAQ Iron and Crescent Steel
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between ITTEFAQ and Crescent is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding ITTEFAQ Iron Industries and Crescent Steel Allied in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Steel Allied 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 Crescent Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Steel Allied has no effect on the direction of ITTEFAQ Iron i.e., ITTEFAQ Iron and Crescent Steel go up and down completely randomly.
Pair Corralation between ITTEFAQ Iron and Crescent Steel
Assuming the 90 days trading horizon ITTEFAQ Iron Industries is expected to under-perform the Crescent Steel. In addition to that, ITTEFAQ Iron is 1.12 times more volatile than Crescent Steel Allied. It trades about -0.11 of its total potential returns per unit of risk. Crescent Steel Allied is currently generating about -0.08 per unit of volatility. If you would invest 12,041 in Crescent Steel Allied on November 4, 2024 and sell it today you would lose (953.00) from holding Crescent Steel Allied or give up 7.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITTEFAQ Iron Industries vs. Crescent Steel Allied
Performance |
| Timeline |
| ITTEFAQ Iron Industries |
| Crescent Steel Allied |
ITTEFAQ Iron and Crescent Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITTEFAQ Iron and Crescent Steel
The main advantage of trading using opposite ITTEFAQ Iron and Crescent Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITTEFAQ Iron position performs unexpectedly, Crescent 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 Crescent Steel will offset losses from the drop in Crescent Steel's long position.| ITTEFAQ Iron vs. Crescent Star Insurance | ITTEFAQ Iron vs. Quice Food Industries | ITTEFAQ Iron vs. 786 Investment Limited | ITTEFAQ Iron vs. United Insurance |
| Crescent Steel vs. Crescent Star Insurance | Crescent Steel vs. Shaheen Insurance | Crescent Steel vs. Unilever Pakistan Foods | Crescent Steel vs. Pakistan Reinsurance |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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