Correlation Between Jubilee Life and Metropolitan Steel
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Metropolitan Steel 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 Metropolitan Steel 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 Metropolitan Steel Corp, you can compare the effects of market volatilities on Jubilee Life and Metropolitan Steel 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 Metropolitan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Metropolitan Steel.
Diversification Opportunities for Jubilee Life and Metropolitan Steel
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jubilee and Metropolitan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Metropolitan Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Steel Corp 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 Metropolitan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Steel Corp has no effect on the direction of Jubilee Life i.e., Jubilee Life and Metropolitan Steel go up and down completely randomly.
Pair Corralation between Jubilee Life and Metropolitan Steel
Assuming the 90 days trading horizon Jubilee Life Insurance is expected to generate 0.64 times more return on investment than Metropolitan Steel. However, Jubilee Life Insurance is 1.57 times less risky than Metropolitan Steel. It trades about 0.06 of its potential returns per unit of risk. Metropolitan Steel Corp is currently generating about -0.09 per unit of risk. If you would invest 10,085 in Jubilee Life Insurance on November 28, 2024 and sell it today you would earn a total of 7,685 from holding Jubilee Life Insurance or generate 76.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 63.53% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Metropolitan Steel Corp
Performance |
| Timeline |
| Jubilee Life Insurance |
| Metropolitan Steel Corp |
Jubilee Life and Metropolitan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Metropolitan Steel
The main advantage of trading using opposite Jubilee Life and Metropolitan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Metropolitan Steel 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 Metropolitan Steel will offset losses from the drop in Metropolitan Steel's long position.| Jubilee Life vs. Ittehad Chemicals | Jubilee Life vs. Habib Insurance | Jubilee Life vs. Silkbank | Jubilee Life vs. Metropolitan Steel Corp |
| Metropolitan Steel vs. Ghani Chemical Industries | Metropolitan Steel vs. Arpak International Investment | Metropolitan Steel vs. JS Investments | Metropolitan Steel vs. Murree Brewery |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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