Correlation Between Karachi 100 and Pakistan International
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By analyzing existing cross correlation between Karachi 100 and Pakistan International Bulk, you can compare the effects of market volatilities on Karachi 100 and Pakistan International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karachi 100 and Pakistan International.
Diversification Opportunities for Karachi 100 and Pakistan International
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Karachi and Pakistan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Karachi 100 and Pakistan International Bulk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan International has no effect on the direction of Karachi 100 i.e., Karachi 100 and Pakistan International go up and down completely randomly.
Pair Corralation between Karachi 100 and Pakistan International
Assuming the 90 days trading horizon Karachi 100 is expected to generate 0.37 times more return on investment than Pakistan International. However, Karachi 100 is 2.67 times less risky than Pakistan International. It trades about 0.56 of its potential returns per unit of risk. Pakistan International Bulk 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karachi 100 vs. Pakistan International Bulk
Performance |
| Timeline |
Karachi 100 and Pakistan International Volatility Contrast
Predicted Return Density |
| Returns |
Karachi 100
Pair trading matchups for Karachi 100
Pakistan International Bulk
Pair trading matchups for Pakistan International
Pair Trading with Karachi 100 and Pakistan International
The main advantage of trading using opposite Karachi 100 and Pakistan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karachi 100 position performs unexpectedly, Pakistan International 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 International will offset losses from the drop in Pakistan International's long position.| Karachi 100 vs. Pakistan Telecommunication | Karachi 100 vs. Unity Foods | Karachi 100 vs. NetSol Technologies | Karachi 100 vs. Dost Steels |
| Pakistan International vs. The Organic Meat | Pakistan International vs. National Foods | Pakistan International vs. Air Link Communication | Pakistan International vs. Big Bird 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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