Correlation Between JS Investments and Al Shaheer
Can any of the company-specific risk be diversified away by investing in both JS Investments and Al Shaheer 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 JS Investments and Al Shaheer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JS Investments and Al Shaheer, you can compare the effects of market volatilities on JS Investments and Al Shaheer 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 JS Investments with a short position of Al Shaheer. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Investments and Al Shaheer.
Diversification Opportunities for JS Investments and Al Shaheer
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between JSIL and ASC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and Al Shaheer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Shaheer and JS Investments 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 JS Investments are associated (or correlated) with Al Shaheer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Shaheer has no effect on the direction of JS Investments i.e., JS Investments and Al Shaheer go up and down completely randomly.
Pair Corralation between JS Investments and Al Shaheer
Assuming the 90 days trading horizon JS Investments is expected to generate 1.31 times more return on investment than Al Shaheer. However, JS Investments is 1.31 times more volatile than Al Shaheer. It trades about 0.06 of its potential returns per unit of risk. Al Shaheer is currently generating about 0.0 per unit of risk. If you would invest 1,618 in JS Investments on September 12, 2024 and sell it today you would earn a total of 851.00 from holding JS Investments or generate 52.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.09% |
| Values | Daily Returns |
JS Investments vs. Al Shaheer
Performance |
| Timeline |
| JS Investments |
| Al Shaheer |
JS Investments and Al Shaheer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JS Investments and Al Shaheer
The main advantage of trading using opposite JS Investments and Al Shaheer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JS Investments position performs unexpectedly, Al Shaheer 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 Al Shaheer will offset losses from the drop in Al Shaheer's long position.| JS Investments vs. Sardar Chemical Industries | JS Investments vs. Engro Polymer Chemicals | JS Investments vs. WorldCall Telecom | JS Investments vs. Pakistan Synthetics |
| Al Shaheer vs. Unity Foods | Al Shaheer vs. Lotte Chemical Pakistan | Al Shaheer vs. Agritech | Al Shaheer vs. JS Investments |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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