Correlation Between Khyber Tobacco and Loads
Can any of the company-specific risk be diversified away by investing in both Khyber Tobacco and Loads 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 Loads into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khyber Tobacco and Loads, you can compare the effects of market volatilities on Khyber Tobacco and Loads 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 Loads. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khyber Tobacco and Loads.
Diversification Opportunities for Khyber Tobacco and Loads
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Khyber and Loads is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Khyber Tobacco and Loads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loads 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 Loads. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loads has no effect on the direction of Khyber Tobacco i.e., Khyber Tobacco and Loads go up and down completely randomly.
Pair Corralation between Khyber Tobacco and Loads
Assuming the 90 days trading horizon Khyber Tobacco is expected to under-perform the Loads. In addition to that, Khyber Tobacco is 1.64 times more volatile than Loads. It trades about -0.04 of its total potential returns per unit of risk. Loads is currently generating about 0.05 per unit of volatility. If you would invest 1,152 in Loads on September 3, 2024 and sell it today you would earn a total of 209.00 from holding Loads or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 69.93% |
| Values | Daily Returns |
Khyber Tobacco vs. Loads
Performance |
| Timeline |
| Khyber Tobacco |
| Loads |
Khyber Tobacco and Loads Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khyber Tobacco and Loads
The main advantage of trading using opposite Khyber Tobacco and Loads positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khyber Tobacco position performs unexpectedly, Loads 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 Loads will offset losses from the drop in Loads' long position.| Khyber Tobacco vs. Habib Insurance | Khyber Tobacco vs. Pakistan Refinery | Khyber Tobacco vs. Century Insurance | Khyber Tobacco vs. Al Khair Gadoon Limited |
| Loads vs. International Steels | Loads vs. ITTEFAQ Iron Industries | Loads vs. Adamjee Insurance | Loads vs. Data Agro |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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