Correlation Between Karachi 100 and 1 Year
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By analyzing existing cross correlation between Karachi 100 and 1 Year GIS, you can compare the effects of market volatilities on Karachi 100 and 1 Year 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 1 Year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karachi 100 and 1 Year.
Diversification Opportunities for Karachi 100 and 1 Year
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Karachi and P01GIS090525 is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Karachi 100 and 1 Year GIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1 Year GIS 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 1 Year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1 Year GIS has no effect on the direction of Karachi 100 i.e., Karachi 100 and 1 Year go up and down completely randomly.
Pair Corralation between Karachi 100 and 1 Year
Assuming the 90 days trading horizon Karachi 100 is expected to generate 16.82 times more return on investment than 1 Year. However, Karachi 100 is 16.82 times more volatile than 1 Year GIS. It trades about 0.35 of its potential returns per unit of risk. 1 Year GIS is currently generating about 1.0 per unit of risk. If you would invest 9,085,985 in Karachi 100 on September 2, 2024 and sell it today you would earn a total of 1,049,715 from holding Karachi 100 or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Karachi 100 vs. 1 Year GIS
Performance |
| Timeline |
Karachi 100 and 1 Year Volatility Contrast
Predicted Return Density |
| Returns |
Karachi 100
Pair trading matchups for Karachi 100
1 Year GIS
Pair trading matchups for 1 Year
Pair Trading with Karachi 100 and 1 Year
The main advantage of trading using opposite Karachi 100 and 1 Year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karachi 100 position performs unexpectedly, 1 Year 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 1 Year will offset losses from the drop in 1 Year's long position.| Karachi 100 vs. JS Investments | Karachi 100 vs. East West Insurance | Karachi 100 vs. Premier Insurance | Karachi 100 vs. Wah Nobel Chemicals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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