Correlation Between Loads and Agha Steel
Can any of the company-specific risk be diversified away by investing in both Loads and Agha Steel 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 Loads and Agha Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loads and Agha Steel Industries, you can compare the effects of market volatilities on Loads and Agha Steel 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 Loads with a short position of Agha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loads and Agha Steel.
Diversification Opportunities for Loads and Agha Steel
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Loads and Agha is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Loads and Agha Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agha Steel Industries and Loads 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 Loads are associated (or correlated) with Agha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agha Steel Industries has no effect on the direction of Loads i.e., Loads and Agha Steel go up and down completely randomly.
Pair Corralation between Loads and Agha Steel
Assuming the 90 days trading horizon Loads is expected to generate 0.9 times more return on investment than Agha Steel. However, Loads is 1.12 times less risky than Agha Steel. It trades about 0.09 of its potential returns per unit of risk. Agha Steel Industries is currently generating about 0.02 per unit of risk. If you would invest 1,029 in Loads on August 28, 2024 and sell it today you would earn a total of 324.00 from holding Loads or generate 31.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loads vs. Agha Steel Industries
Performance |
| Timeline |
| Loads |
| Agha Steel Industries |
Loads and Agha Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loads and Agha Steel
The main advantage of trading using opposite Loads and Agha Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loads position performs unexpectedly, Agha Steel 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 Agha Steel will offset losses from the drop in Agha Steel's long position.| Loads vs. Agha Steel Industries | Loads vs. NetSol Technologies | Loads vs. Matco Foods | Loads vs. Pak Datacom |
| Agha Steel vs. Habib Insurance | Agha Steel vs. Century Insurance | Agha Steel vs. Reliance Weaving Mills | Agha Steel 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |