Correlation Between Jubilee Life and Pace Pakistan
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Pace Pakistan 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 Pace Pakistan 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 Pace Pakistan, you can compare the effects of market volatilities on Jubilee Life and Pace Pakistan 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 Pace Pakistan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Pace Pakistan.
Diversification Opportunities for Jubilee Life and Pace Pakistan
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jubilee and Pace is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Pace Pakistan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Pakistan 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 Pace Pakistan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Pakistan has no effect on the direction of Jubilee Life i.e., Jubilee Life and Pace Pakistan go up and down completely randomly.
Pair Corralation between Jubilee Life and Pace Pakistan
Assuming the 90 days trading horizon Jubilee Life Insurance is expected to generate 0.63 times more return on investment than Pace Pakistan. However, Jubilee Life Insurance is 1.59 times less risky than Pace Pakistan. It trades about -0.03 of its potential returns per unit of risk. Pace Pakistan is currently generating about -0.27 per unit of risk. If you would invest 17,686 in Jubilee Life Insurance on November 7, 2024 and sell it today you would lose (235.00) from holding Jubilee Life Insurance or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Pace Pakistan
Performance |
| Timeline |
| Jubilee Life Insurance |
| Pace Pakistan |
Jubilee Life and Pace Pakistan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Pace Pakistan
The main advantage of trading using opposite Jubilee Life and Pace Pakistan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Pace Pakistan 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 Pace Pakistan will offset losses from the drop in Pace Pakistan's long position.| Jubilee Life vs. Air Link Communication | Jubilee Life vs. National Foods | Jubilee Life vs. Roshan Packages | Jubilee Life vs. Matco Foods |
| Pace Pakistan vs. Unity Foods | Pace Pakistan vs. MCB Bank | Pace Pakistan vs. JS Bank | Pace Pakistan vs. Unilever Pakistan Foods |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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