Correlation Between ITTEFAQ Iron and Shadab Textile
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By analyzing existing cross correlation between ITTEFAQ Iron Industries and Shadab Textile Mills, you can compare the effects of market volatilities on ITTEFAQ Iron and Shadab Textile 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 Shadab Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITTEFAQ Iron and Shadab Textile.
Diversification Opportunities for ITTEFAQ Iron and Shadab Textile
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ITTEFAQ and Shadab is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ITTEFAQ Iron Industries and Shadab Textile Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shadab Textile 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 Shadab Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shadab Textile Mills has no effect on the direction of ITTEFAQ Iron i.e., ITTEFAQ Iron and Shadab Textile go up and down completely randomly.
Pair Corralation between ITTEFAQ Iron and Shadab Textile
Assuming the 90 days trading horizon ITTEFAQ Iron Industries is expected to under-perform the Shadab Textile. In addition to that, ITTEFAQ Iron is 1.08 times more volatile than Shadab Textile Mills. It trades about -0.18 of its total potential returns per unit of risk. Shadab Textile Mills is currently generating about 0.02 per unit of volatility. If you would invest 2,163 in Shadab Textile Mills on November 6, 2024 and sell it today you would lose (6.00) from holding Shadab Textile Mills or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITTEFAQ Iron Industries vs. Shadab Textile Mills
Performance |
| Timeline |
| ITTEFAQ Iron Industries |
| Shadab Textile Mills |
ITTEFAQ Iron and Shadab Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITTEFAQ Iron and Shadab Textile
The main advantage of trading using opposite ITTEFAQ Iron and Shadab Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITTEFAQ Iron position performs unexpectedly, Shadab Textile 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 Shadab Textile will offset losses from the drop in Shadab Textile's long position.| ITTEFAQ Iron vs. JS Investments | ITTEFAQ Iron vs. Ghani Chemical Industries | ITTEFAQ Iron vs. Nimir Industrial Chemical | ITTEFAQ Iron vs. Pakistan Telecommunication |
| Shadab Textile vs. Big Bird Foods | Shadab Textile vs. Bawany Air Products | Shadab Textile vs. Pakistan Telecommunication | Shadab Textile vs. MCB Investment Manag |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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