Correlation Between Jubilee Life and Pakistan Refinery
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Pakistan Refinery 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 Pakistan Refinery 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 Pakistan Refinery, you can compare the effects of market volatilities on Jubilee Life and Pakistan Refinery 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 Pakistan Refinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Pakistan Refinery.
Diversification Opportunities for Jubilee Life and Pakistan Refinery
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jubilee and Pakistan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Pakistan Refinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Refinery 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 Pakistan Refinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Refinery has no effect on the direction of Jubilee Life i.e., Jubilee Life and Pakistan Refinery go up and down completely randomly.
Pair Corralation between Jubilee Life and Pakistan Refinery
Assuming the 90 days trading horizon Jubilee Life Insurance is expected to generate 0.98 times more return on investment than Pakistan Refinery. However, Jubilee Life Insurance is 1.02 times less risky than Pakistan Refinery. It trades about 0.39 of its potential returns per unit of risk. Pakistan Refinery is currently generating about 0.32 per unit of risk. If you would invest 13,200 in Jubilee Life Insurance on September 12, 2024 and sell it today you would earn a total of 5,297 from holding Jubilee Life Insurance or generate 40.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Pakistan Refinery
Performance |
| Timeline |
| Jubilee Life Insurance |
| Pakistan Refinery |
Jubilee Life and Pakistan Refinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Pakistan Refinery
The main advantage of trading using opposite Jubilee Life and Pakistan Refinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Pakistan Refinery 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 Pakistan Refinery will offset losses from the drop in Pakistan Refinery's long position.| Jubilee Life vs. Masood Textile Mills | Jubilee Life vs. Fauji Foods | Jubilee Life vs. KSB Pumps | Jubilee Life vs. Mari Petroleum |
| Pakistan Refinery vs. Habib Insurance | Pakistan Refinery vs. Ghandhara Automobile | Pakistan Refinery vs. Century Insurance | Pakistan Refinery vs. Reliance Weaving Mills |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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