Correlation Between ITTEFAQ Iron and Pakistan Services
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By analyzing existing cross correlation between ITTEFAQ Iron Industries and Pakistan Services Limited, you can compare the effects of market volatilities on ITTEFAQ Iron and Pakistan Services 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 Pakistan Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITTEFAQ Iron and Pakistan Services.
Diversification Opportunities for ITTEFAQ Iron and Pakistan Services
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ITTEFAQ and Pakistan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ITTEFAQ Iron Industries and Pakistan Services Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Services 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 Pakistan Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Services has no effect on the direction of ITTEFAQ Iron i.e., ITTEFAQ Iron and Pakistan Services go up and down completely randomly.
Pair Corralation between ITTEFAQ Iron and Pakistan Services
Assuming the 90 days trading horizon ITTEFAQ Iron Industries is expected to generate 0.56 times more return on investment than Pakistan Services. However, ITTEFAQ Iron Industries is 1.79 times less risky than Pakistan Services. It trades about 0.35 of its potential returns per unit of risk. Pakistan Services Limited is currently generating about 0.13 per unit of risk. If you would invest 618.00 in ITTEFAQ Iron Industries on September 15, 2024 and sell it today you would earn a total of 112.00 from holding ITTEFAQ Iron Industries or generate 18.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITTEFAQ Iron Industries vs. Pakistan Services Limited
Performance |
| Timeline |
| ITTEFAQ Iron Industries |
| Pakistan Services |
ITTEFAQ Iron and Pakistan Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITTEFAQ Iron and Pakistan Services
The main advantage of trading using opposite ITTEFAQ Iron and Pakistan Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITTEFAQ Iron position performs unexpectedly, Pakistan Services 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 Pakistan Services will offset losses from the drop in Pakistan Services' long position.| ITTEFAQ Iron vs. Masood Textile Mills | ITTEFAQ Iron vs. Fauji Foods | ITTEFAQ Iron vs. KSB Pumps | ITTEFAQ Iron vs. Mari Petroleum |
| Pakistan Services vs. Shaheen Insurance | Pakistan Services vs. Askari Bank | Pakistan Services vs. Atlas Insurance | Pakistan Services vs. ITTEFAQ Iron Industries |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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