Correlation Between Jubilee Life and Habib Bank
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Habib Bank 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 Habib Bank 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 Habib Bank, you can compare the effects of market volatilities on Jubilee Life and Habib Bank 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 Habib Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Habib Bank.
Diversification Opportunities for Jubilee Life and Habib Bank
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jubilee and Habib is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Habib Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Bank 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 Habib Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Bank has no effect on the direction of Jubilee Life i.e., Jubilee Life and Habib Bank go up and down completely randomly.
Pair Corralation between Jubilee Life and Habib Bank
Assuming the 90 days trading horizon Jubilee Life is expected to generate 2.1 times less return on investment than Habib Bank. In addition to that, Jubilee Life is 1.26 times more volatile than Habib Bank. It trades about 0.04 of its total potential returns per unit of risk. Habib Bank is currently generating about 0.11 per unit of volatility. If you would invest 5,457 in Habib Bank on August 25, 2024 and sell it today you would earn a total of 9,013 from holding Habib Bank or generate 165.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.47% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Habib Bank
Performance |
| Timeline |
| Jubilee Life Insurance |
| Habib Bank |
Jubilee Life and Habib Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Habib Bank
The main advantage of trading using opposite Jubilee Life and Habib Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Habib Bank 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 Habib Bank will offset losses from the drop in Habib Bank's long position.| Jubilee Life vs. MCB Investment Manag | Jubilee Life vs. JS Investments | Jubilee Life vs. National Bank of | Jubilee Life vs. Amreli Steels |
| Habib Bank vs. Matco Foods | Habib Bank vs. IBL HealthCare | Habib Bank vs. Nimir Industrial Chemical | Habib Bank vs. Shaheen 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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