Correlation Between Jubilee Life and Nishat Mills
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Nishat Mills 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 Nishat Mills 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 Nishat Mills, you can compare the effects of market volatilities on Jubilee Life and Nishat Mills 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 Nishat Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Nishat Mills.
Diversification Opportunities for Jubilee Life and Nishat Mills
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jubilee and Nishat is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Nishat Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nishat Mills 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 Nishat Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nishat Mills has no effect on the direction of Jubilee Life i.e., Jubilee Life and Nishat Mills go up and down completely randomly.
Pair Corralation between Jubilee Life and Nishat Mills
Assuming the 90 days trading horizon Jubilee Life Insurance is expected to generate 1.2 times more return on investment than Nishat Mills. However, Jubilee Life is 1.2 times more volatile than Nishat Mills. It trades about 0.03 of its potential returns per unit of risk. Nishat Mills is currently generating about 0.01 per unit of risk. If you would invest 14,740 in Jubilee Life Insurance on September 4, 2024 and sell it today you would earn a total of 1,151 from holding Jubilee Life Insurance or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.5% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Nishat Mills
Performance |
| Timeline |
| Jubilee Life Insurance |
| Nishat Mills |
Jubilee Life and Nishat Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Nishat Mills
The main advantage of trading using opposite Jubilee Life and Nishat Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Nishat Mills 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 Nishat Mills will offset losses from the drop in Nishat Mills' long position.| Jubilee Life vs. Oil and Gas | Jubilee Life vs. Pakistan State Oil | Jubilee Life vs. Pakistan Petroleum | Jubilee Life vs. Fauji Fertilizer |
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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 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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