Correlation Between ITTEFAQ Iron and Thatta Cement
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By analyzing existing cross correlation between ITTEFAQ Iron Industries and Thatta Cement, you can compare the effects of market volatilities on ITTEFAQ Iron and Thatta Cement 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 Thatta Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITTEFAQ Iron and Thatta Cement.
Diversification Opportunities for ITTEFAQ Iron and Thatta Cement
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITTEFAQ and Thatta is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ITTEFAQ Iron Industries and Thatta Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thatta Cement 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 Thatta Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thatta Cement has no effect on the direction of ITTEFAQ Iron i.e., ITTEFAQ Iron and Thatta Cement go up and down completely randomly.
Pair Corralation between ITTEFAQ Iron and Thatta Cement
Assuming the 90 days trading horizon ITTEFAQ Iron is expected to generate 2.12 times less return on investment than Thatta Cement. But when comparing it to its historical volatility, ITTEFAQ Iron Industries is 2.58 times less risky than Thatta Cement. It trades about 0.33 of its potential returns per unit of risk. Thatta Cement is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 11,126 in Thatta Cement on August 24, 2024 and sell it today you would earn a total of 3,714 from holding Thatta Cement or generate 33.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITTEFAQ Iron Industries vs. Thatta Cement
Performance |
| Timeline |
| ITTEFAQ Iron Industries |
| Thatta Cement |
ITTEFAQ Iron and Thatta Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITTEFAQ Iron and Thatta Cement
The main advantage of trading using opposite ITTEFAQ Iron and Thatta Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITTEFAQ Iron position performs unexpectedly, Thatta Cement 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 Thatta Cement will offset losses from the drop in Thatta Cement's long position.| ITTEFAQ Iron vs. Oil and Gas | ITTEFAQ Iron vs. Pakistan State Oil | ITTEFAQ Iron vs. Pakistan Petroleum | ITTEFAQ Iron vs. Engro |
| Thatta Cement vs. Nimir Industrial Chemical | Thatta Cement vs. Century Insurance | Thatta Cement vs. Jubilee Life Insurance | Thatta Cement vs. United Insurance |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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