Correlation Between Jubilee Life and Matco Foods
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Matco Foods 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 Matco Foods 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 Matco Foods, you can compare the effects of market volatilities on Jubilee Life and Matco Foods 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 Matco Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Matco Foods.
Diversification Opportunities for Jubilee Life and Matco Foods
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jubilee and Matco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Matco Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matco Foods 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 Matco Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matco Foods has no effect on the direction of Jubilee Life i.e., Jubilee Life and Matco Foods go up and down completely randomly.
Pair Corralation between Jubilee Life and Matco Foods
Assuming the 90 days trading horizon Jubilee Life Insurance is expected to generate 0.87 times more return on investment than Matco Foods. However, Jubilee Life Insurance is 1.15 times less risky than Matco Foods. It trades about 0.07 of its potential returns per unit of risk. Matco Foods is currently generating about 0.06 per unit of risk. If you would invest 9,108 in Jubilee Life Insurance on November 28, 2024 and sell it today you would earn a total of 8,662 from holding Jubilee Life Insurance or generate 95.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.57% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Matco Foods
Performance |
| Timeline |
| Jubilee Life Insurance |
| Matco Foods |
Jubilee Life and Matco Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Matco Foods
The main advantage of trading using opposite Jubilee Life and Matco Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Matco Foods 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 Matco Foods will offset losses from the drop in Matco Foods' long position.| Jubilee Life vs. Ittehad Chemicals | Jubilee Life vs. Habib Insurance | Jubilee Life vs. Silkbank | Jubilee Life vs. Metropolitan Steel Corp |
| Matco Foods vs. United Insurance | Matco Foods vs. Crescent Star Insurance | Matco Foods vs. Pakistan Reinsurance | Matco Foods vs. Adamjee 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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