Correlation Between Karachi 100 and Universal Insurance
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By analyzing existing cross correlation between Karachi 100 and Universal Insurance, you can compare the effects of market volatilities on Karachi 100 and Universal Insurance 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 Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karachi 100 and Universal Insurance.
Diversification Opportunities for Karachi 100 and Universal Insurance
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Karachi and Universal is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Karachi 100 and Universal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance 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 Universal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Insurance has no effect on the direction of Karachi 100 i.e., Karachi 100 and Universal Insurance go up and down completely randomly.
Pair Corralation between Karachi 100 and Universal Insurance
Assuming the 90 days trading horizon Karachi 100 is expected to generate 2.19 times less return on investment than Universal Insurance. But when comparing it to its historical volatility, Karachi 100 is 4.72 times less risky than Universal Insurance. It trades about 0.21 of its potential returns per unit of risk. Universal Insurance is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 588.00 in Universal Insurance on October 13, 2024 and sell it today you would earn a total of 424.00 from holding Universal Insurance or generate 72.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 93.66% |
| Values | Daily Returns |
Karachi 100 vs. Universal Insurance
Performance |
| Timeline |
Karachi 100 and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Karachi 100
Pair trading matchups for Karachi 100
Universal Insurance
Pair trading matchups for Universal Insurance
Pair Trading with Karachi 100 and Universal Insurance
The main advantage of trading using opposite Karachi 100 and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karachi 100 position performs unexpectedly, Universal Insurance 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 Universal Insurance will offset losses from the drop in Universal Insurance's long position.| Karachi 100 vs. Dost Steels | Karachi 100 vs. Pakistan Hotel Developers | Karachi 100 vs. Big Bird Foods | Karachi 100 vs. Shifa International Hospitals |
| Universal Insurance vs. Masood Textile Mills | Universal Insurance vs. Fauji Foods | Universal Insurance vs. KSB Pumps | Universal Insurance vs. Mari Petroleum |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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