Correlation Between KSB Pumps and Askari General
Can any of the company-specific risk be diversified away by investing in both KSB Pumps and Askari General 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 KSB Pumps and Askari General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KSB Pumps and Askari General Insurance, you can compare the effects of market volatilities on KSB Pumps and Askari General 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 KSB Pumps with a short position of Askari General. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSB Pumps and Askari General.
Diversification Opportunities for KSB Pumps and Askari General
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KSB and Askari is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding KSB Pumps and Askari General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Askari General Insurance and KSB Pumps 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 KSB Pumps are associated (or correlated) with Askari General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Askari General Insurance has no effect on the direction of KSB Pumps i.e., KSB Pumps and Askari General go up and down completely randomly.
Pair Corralation between KSB Pumps and Askari General
Assuming the 90 days trading horizon KSB Pumps is expected to generate 1.04 times less return on investment than Askari General. In addition to that, KSB Pumps is 1.24 times more volatile than Askari General Insurance. It trades about 0.11 of its total potential returns per unit of risk. Askari General Insurance is currently generating about 0.14 per unit of volatility. If you would invest 3,050 in Askari General Insurance on November 28, 2024 and sell it today you would earn a total of 151.00 from holding Askari General Insurance or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
KSB Pumps vs. Askari General Insurance
Performance |
| Timeline |
| KSB Pumps |
| Askari General Insurance |
KSB Pumps and Askari General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSB Pumps and Askari General
The main advantage of trading using opposite KSB Pumps and Askari General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSB Pumps position performs unexpectedly, Askari General 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 Askari General will offset losses from the drop in Askari General's long position.| KSB Pumps vs. Soneri Bank | KSB Pumps vs. Pakistan Reinsurance | KSB Pumps vs. ORIX Leasing Pakistan | KSB Pumps vs. Sindh Modaraba Management |
| Askari General vs. Jubilee Life Insurance | Askari General vs. Allied Bank | Askari General vs. Habib Insurance | Askari General vs. Atlas Insurance |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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