Correlation Between Karachi 100 and Pakistan Hotel
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By analyzing existing cross correlation between Karachi 100 and Pakistan Hotel Developers, you can compare the effects of market volatilities on Karachi 100 and Pakistan Hotel 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 Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karachi 100 and Pakistan Hotel.
Diversification Opportunities for Karachi 100 and Pakistan Hotel
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Karachi and Pakistan is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Karachi 100 and Pakistan Hotel Developers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Hotel Developers 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 Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Hotel Developers has no effect on the direction of Karachi 100 i.e., Karachi 100 and Pakistan Hotel go up and down completely randomly.
Pair Corralation between Karachi 100 and Pakistan Hotel
Assuming the 90 days trading horizon Karachi 100 is expected to generate 0.39 times more return on investment than Pakistan Hotel. However, Karachi 100 is 2.53 times less risky than Pakistan Hotel. It trades about 0.5 of its potential returns per unit of risk. Pakistan Hotel Developers is currently generating about -0.25 per unit of risk. If you would invest 9,019,552 in Karachi 100 on August 27, 2024 and sell it today you would earn a total of 788,426 from holding Karachi 100 or generate 8.74% 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 Hotel Developers
Performance |
| Timeline |
Karachi 100 and Pakistan Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Karachi 100
Pair trading matchups for Karachi 100
Pakistan Hotel Developers
Pair trading matchups for Pakistan Hotel
Pair Trading with Karachi 100 and Pakistan Hotel
The main advantage of trading using opposite Karachi 100 and Pakistan Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karachi 100 position performs unexpectedly, Pakistan Hotel 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 Hotel will offset losses from the drop in Pakistan Hotel's long position.| Karachi 100 vs. Ghani Chemical Industries | Karachi 100 vs. Wah Nobel Chemicals | Karachi 100 vs. Pakistan Hotel Developers | Karachi 100 vs. Sitara Chemical Industries |
| Pakistan Hotel vs. Habib Insurance | Pakistan Hotel vs. Century Insurance | Pakistan Hotel vs. Reliance Weaving Mills | Pakistan Hotel vs. Media Times |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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