Correlation Between Jubilee Life and Ghani Chemical
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Ghani Chemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jubilee Life and Ghani Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jubilee Life Insurance and Ghani Chemical Industries, you can compare the effects of market volatilities on Jubilee Life and Ghani Chemical 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 Jubilee Life with a short position of Ghani Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Ghani Chemical.
Diversification Opportunities for Jubilee Life and Ghani Chemical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jubilee and Ghani is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Ghani Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ghani Chemical Industries and Jubilee Life 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 Jubilee Life Insurance are associated (or correlated) with Ghani Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ghani Chemical Industries has no effect on the direction of Jubilee Life i.e., Jubilee Life and Ghani Chemical go up and down completely randomly.
Pair Corralation between Jubilee Life and Ghani Chemical
Assuming the 90 days trading horizon Jubilee Life is expected to generate 1.78 times less return on investment than Ghani Chemical. But when comparing it to its historical volatility, Jubilee Life Insurance is 1.7 times less risky than Ghani Chemical. It trades about 0.09 of its potential returns per unit of risk. Ghani Chemical Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,019 in Ghani Chemical Industries on November 1, 2024 and sell it today you would earn a total of 795.00 from holding Ghani Chemical Industries or generate 78.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.1% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Ghani Chemical Industries
Performance |
| Timeline |
| Jubilee Life Insurance |
| Ghani Chemical Industries |
Jubilee Life and Ghani Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Ghani Chemical
The main advantage of trading using opposite Jubilee Life and Ghani Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Ghani Chemical 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 Ghani Chemical will offset losses from the drop in Ghani Chemical's long position.| Jubilee Life vs. Masood Textile Mills | Jubilee Life vs. Fauji Foods | Jubilee Life vs. KSB Pumps | Jubilee Life vs. Mari Petroleum |
| Ghani Chemical vs. Jubilee Life Insurance | Ghani Chemical vs. Fateh Sports Wear | Ghani Chemical vs. Metropolitan Steel Corp | Ghani Chemical vs. Premier 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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