Correlation Between Jubilee Life and Nimir Industrial
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Nimir Industrial 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 Nimir Industrial 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 Nimir Industrial Chemical, you can compare the effects of market volatilities on Jubilee Life and Nimir Industrial 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 Nimir Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Nimir Industrial.
Diversification Opportunities for Jubilee Life and Nimir Industrial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jubilee and Nimir is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Nimir Industrial Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nimir Industrial Chemical 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 Nimir Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nimir Industrial Chemical has no effect on the direction of Jubilee Life i.e., Jubilee Life and Nimir Industrial go up and down completely randomly.
Pair Corralation between Jubilee Life and Nimir Industrial
Assuming the 90 days trading horizon Jubilee Life is expected to generate 2.12 times less return on investment than Nimir Industrial. In addition to that, Jubilee Life is 1.3 times more volatile than Nimir Industrial Chemical. It trades about 0.05 of its total potential returns per unit of risk. Nimir Industrial Chemical is currently generating about 0.14 per unit of volatility. If you would invest 12,253 in Nimir Industrial Chemical on August 28, 2024 and sell it today you would earn a total of 747.00 from holding Nimir Industrial Chemical or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Nimir Industrial Chemical
Performance |
| Timeline |
| Jubilee Life Insurance |
| Nimir Industrial Chemical |
Jubilee Life and Nimir Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Nimir Industrial
The main advantage of trading using opposite Jubilee Life and Nimir Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Nimir Industrial 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 Nimir Industrial will offset losses from the drop in Nimir Industrial's long position.| Jubilee Life vs. Habib Bank | Jubilee Life vs. National Bank of | Jubilee Life vs. United Bank | Jubilee Life vs. MCB Bank |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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