Correlation Between Khyber Tobacco and Hi Tech
Can any of the company-specific risk be diversified away by investing in both Khyber Tobacco and Hi Tech 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 Khyber Tobacco and Hi Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khyber Tobacco and Hi Tech Lubricants, you can compare the effects of market volatilities on Khyber Tobacco and Hi Tech 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 Khyber Tobacco with a short position of Hi Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khyber Tobacco and Hi Tech.
Diversification Opportunities for Khyber Tobacco and Hi Tech
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Khyber and HTL is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Khyber Tobacco and Hi Tech Lubricants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech Lubricants and Khyber Tobacco 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 Khyber Tobacco are associated (or correlated) with Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech Lubricants has no effect on the direction of Khyber Tobacco i.e., Khyber Tobacco and Hi Tech go up and down completely randomly.
Pair Corralation between Khyber Tobacco and Hi Tech
Assuming the 90 days trading horizon Khyber Tobacco is expected to generate 102.79 times less return on investment than Hi Tech. But when comparing it to its historical volatility, Khyber Tobacco is 1.26 times less risky than Hi Tech. It trades about 0.0 of its potential returns per unit of risk. Hi Tech Lubricants is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,280 in Hi Tech Lubricants on November 28, 2024 and sell it today you would earn a total of 2,398 from holding Hi Tech Lubricants or generate 105.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.75% |
| Values | Daily Returns |
Khyber Tobacco vs. Hi Tech Lubricants
Performance |
| Timeline |
| Khyber Tobacco |
| Hi Tech Lubricants |
Khyber Tobacco and Hi Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khyber Tobacco and Hi Tech
The main advantage of trading using opposite Khyber Tobacco and Hi Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khyber Tobacco position performs unexpectedly, Hi Tech 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 Hi Tech will offset losses from the drop in Hi Tech's long position.| Khyber Tobacco vs. Masood Textile Mills | Khyber Tobacco vs. Fauji Foods | Khyber Tobacco vs. KSB Pumps | Khyber Tobacco vs. Mari Petroleum |
| Hi Tech vs. Pakistan Synthetics | Hi Tech vs. 786 Investment Limited | Hi Tech vs. ITTEFAQ Iron Industries | Hi Tech vs. WorldCall Telecom |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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