Correlation Between Karachi 100 and Pakistan Engineering
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By analyzing existing cross correlation between Karachi 100 and Pakistan Engineering, you can compare the effects of market volatilities on Karachi 100 and Pakistan Engineering 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 Pakistan Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karachi 100 and Pakistan Engineering.
Diversification Opportunities for Karachi 100 and Pakistan Engineering
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Karachi and Pakistan is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Karachi 100 and Pakistan Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Engineering 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 Pakistan Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Engineering has no effect on the direction of Karachi 100 i.e., Karachi 100 and Pakistan Engineering go up and down completely randomly.
Pair Corralation between Karachi 100 and Pakistan Engineering
Assuming the 90 days trading horizon Karachi 100 is expected to generate 0.59 times more return on investment than Pakistan Engineering. However, Karachi 100 is 1.71 times less risky than Pakistan Engineering. It trades about 0.56 of its potential returns per unit of risk. Pakistan Engineering is currently generating about -0.15 per unit of risk. If you would invest 9,322,456 in Karachi 100 on September 13, 2024 and sell it today you would earn a total of 2,095,644 from holding Karachi 100 or generate 22.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karachi 100 vs. Pakistan Engineering
Performance |
| Timeline |
Karachi 100 and Pakistan Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Karachi 100
Pair trading matchups for Karachi 100
Pakistan Engineering
Pair trading matchups for Pakistan Engineering
Pair Trading with Karachi 100 and Pakistan Engineering
The main advantage of trading using opposite Karachi 100 and Pakistan Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karachi 100 position performs unexpectedly, Pakistan Engineering 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 Pakistan Engineering will offset losses from the drop in Pakistan Engineering's long position.| Karachi 100 vs. Pakistan Telecommunication | Karachi 100 vs. Unity Foods | Karachi 100 vs. NetSol Technologies | Karachi 100 vs. Dost Steels |
| Pakistan Engineering vs. Unity Foods | Pakistan Engineering vs. Hi Tech Lubricants | Pakistan Engineering vs. Pakistan Telecommunication | Pakistan Engineering vs. Matco Foods |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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