Correlation Between Karachi 100 and Dow Jones
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By analyzing existing cross correlation between Karachi 100 and Dow Jones Industrial, you can compare the effects of market volatilities on Karachi 100 and Dow Jones 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 Karachi 100 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karachi 100 and Dow Jones.
Diversification Opportunities for Karachi 100 and Dow Jones
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Karachi and Dow is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Karachi 100 and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Karachi 100 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 Karachi 100 are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Karachi 100 i.e., Karachi 100 and Dow Jones go up and down completely randomly.
Pair Corralation between Karachi 100 and Dow Jones
Assuming the 90 days trading horizon Karachi 100 is expected to generate 1.55 times more return on investment than Dow Jones. However, Karachi 100 is 1.55 times more volatile than Dow Jones Industrial. It trades about 0.41 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of risk. If you would invest 8,896,677 in Karachi 100 on September 1, 2024 and sell it today you would earn a total of 1,239,023 from holding Karachi 100 or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Karachi 100 vs. Dow Jones Industrial
Performance |
| Timeline |
Karachi 100 and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Karachi 100
Pair trading matchups for Karachi 100
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Karachi 100 and Dow Jones
The main advantage of trading using opposite Karachi 100 and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karachi 100 position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Karachi 100 vs. Nimir Industrial Chemical | Karachi 100 vs. Shaheen Insurance | Karachi 100 vs. Pakistan Telecommunication | Karachi 100 vs. Reliance Insurance Co |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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