Correlation Between Khyber Tobacco and Al Shaheer
Can any of the company-specific risk be diversified away by investing in both Khyber Tobacco 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 Khyber Tobacco and Al Shaheer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khyber Tobacco and Al Shaheer, you can compare the effects of market volatilities on Khyber Tobacco 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 Khyber Tobacco with a short position of Al Shaheer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khyber Tobacco and Al Shaheer.
Diversification Opportunities for Khyber Tobacco and Al Shaheer
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Khyber and ASC is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Khyber Tobacco and Al Shaheer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Shaheer 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 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 Khyber Tobacco i.e., Khyber Tobacco and Al Shaheer go up and down completely randomly.
Pair Corralation between Khyber Tobacco and Al Shaheer
Assuming the 90 days trading horizon Khyber Tobacco is expected to generate 4.08 times less return on investment than Al Shaheer. In addition to that, Khyber Tobacco is 1.76 times more volatile than Al Shaheer. It trades about 0.0 of its total potential returns per unit of risk. Al Shaheer is currently generating about 0.03 per unit of volatility. If you would invest 645.00 in Al Shaheer on September 12, 2024 and sell it today you would earn a total of 158.00 from holding Al Shaheer or generate 24.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 35.26% |
| Values | Daily Returns |
Khyber Tobacco vs. Al Shaheer
Performance |
| Timeline |
| Khyber Tobacco |
| Al Shaheer |
Khyber Tobacco and Al Shaheer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khyber Tobacco and Al Shaheer
The main advantage of trading using opposite Khyber Tobacco and Al Shaheer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khyber Tobacco 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.| Khyber Tobacco vs. Unity Foods | Khyber Tobacco vs. Synthetic Products Enterprises | Khyber Tobacco vs. Sitara Chemical Industries | Khyber Tobacco vs. Amreli Steels |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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