Correlation Between JS Investments and Habib Insurance
Can any of the company-specific risk be diversified away by investing in both JS Investments and Habib Insurance 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 Habib Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JS Investments and Habib Insurance, you can compare the effects of market volatilities on JS Investments and Habib Insurance 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 Habib Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Investments and Habib Insurance.
Diversification Opportunities for JS Investments and Habib Insurance
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JSIL and Habib is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and Habib Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Insurance 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 Habib Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Insurance has no effect on the direction of JS Investments i.e., JS Investments and Habib Insurance go up and down completely randomly.
Pair Corralation between JS Investments and Habib Insurance
Assuming the 90 days trading horizon JS Investments is expected to generate 0.94 times more return on investment than Habib Insurance. However, JS Investments is 1.06 times less risky than Habib Insurance. It trades about 0.06 of its potential returns per unit of risk. Habib Insurance is currently generating about 0.04 per unit of risk. If you would invest 1,301 in JS Investments on August 24, 2024 and sell it today you would earn a total of 949.00 from holding JS Investments or generate 72.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.04% |
| Values | Daily Returns |
JS Investments vs. Habib Insurance
Performance |
| Timeline |
| JS Investments |
| Habib Insurance |
JS Investments and Habib Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JS Investments and Habib Insurance
The main advantage of trading using opposite JS Investments and Habib Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JS Investments position performs unexpectedly, Habib Insurance 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 Habib Insurance will offset losses from the drop in Habib Insurance's long position.| JS Investments vs. Amreli Steels | JS Investments vs. Dost Steels | JS Investments vs. Unilever Pakistan Foods | JS Investments vs. Shifa International Hospitals |
| Habib Insurance vs. The Organic Meat | Habib Insurance vs. Agritech | Habib Insurance vs. JS Global Banking | Habib Insurance vs. IBL HealthCare |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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