Correlation Between Jubilee Life and Wah Nobel
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Wah Nobel 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 Wah Nobel 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 Wah Nobel Chemicals, you can compare the effects of market volatilities on Jubilee Life and Wah Nobel 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 Wah Nobel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Wah Nobel.
Diversification Opportunities for Jubilee Life and Wah Nobel
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jubilee and Wah is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Wah Nobel Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Nobel Chemicals 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 Wah Nobel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Nobel Chemicals has no effect on the direction of Jubilee Life i.e., Jubilee Life and Wah Nobel go up and down completely randomly.
Pair Corralation between Jubilee Life and Wah Nobel
Assuming the 90 days trading horizon Jubilee Life Insurance is expected to generate 1.07 times more return on investment than Wah Nobel. However, Jubilee Life is 1.07 times more volatile than Wah Nobel Chemicals. It trades about -0.1 of its potential returns per unit of risk. Wah Nobel Chemicals is currently generating about -0.15 per unit of risk. If you would invest 17,639 in Jubilee Life Insurance on November 8, 2024 and sell it today you would lose (639.00) from holding Jubilee Life Insurance or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Wah Nobel Chemicals
Performance |
| Timeline |
| Jubilee Life Insurance |
| Wah Nobel Chemicals |
Jubilee Life and Wah Nobel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Wah Nobel
The main advantage of trading using opposite Jubilee Life and Wah Nobel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Wah Nobel 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 Wah Nobel will offset losses from the drop in Wah Nobel's long position.| Jubilee Life vs. Atlas Insurance | Jubilee Life vs. Pakistan Reinsurance | Jubilee Life vs. Premier Insurance | Jubilee Life vs. Reliance Insurance Co |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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