Correlation Between Khalid Siraj and National Foods
Can any of the company-specific risk be diversified away by investing in both Khalid Siraj and National Foods at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Khalid Siraj and National Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khalid Siraj Textile and National Foods, you can compare the effects of market volatilities on Khalid Siraj and National Foods 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 Khalid Siraj with a short position of National Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khalid Siraj and National Foods.
Diversification Opportunities for Khalid Siraj and National Foods
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Khalid and National is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Khalid Siraj Textile and National Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Foods and Khalid Siraj 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 Khalid Siraj Textile are associated (or correlated) with National Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Foods has no effect on the direction of Khalid Siraj i.e., Khalid Siraj and National Foods go up and down completely randomly.
Pair Corralation between Khalid Siraj and National Foods
Assuming the 90 days trading horizon Khalid Siraj Textile is expected to generate 5.87 times more return on investment than National Foods. However, Khalid Siraj is 5.87 times more volatile than National Foods. It trades about 0.18 of its potential returns per unit of risk. National Foods is currently generating about 0.06 per unit of risk. If you would invest 170.00 in Khalid Siraj Textile on September 4, 2024 and sell it today you would earn a total of 903.00 from holding Khalid Siraj Textile or generate 531.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 25.57% |
| Values | Daily Returns |
Khalid Siraj Textile vs. National Foods
Performance |
| Timeline |
| Khalid Siraj Textile |
| National Foods |
Khalid Siraj and National Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khalid Siraj and National Foods
The main advantage of trading using opposite Khalid Siraj and National Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khalid Siraj position performs unexpectedly, National Foods 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 National Foods will offset losses from the drop in National Foods' long position.| Khalid Siraj vs. National Foods | Khalid Siraj vs. Pakistan Telecommunication | Khalid Siraj vs. Big Bird Foods | Khalid Siraj vs. WorldCall Telecom |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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