Correlation Between Masood Textile and Arif Habib
Can any of the company-specific risk be diversified away by investing in both Masood Textile and Arif Habib 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 Masood Textile and Arif Habib into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Masood Textile Mills and Arif Habib, you can compare the effects of market volatilities on Masood Textile and Arif Habib 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 Masood Textile with a short position of Arif Habib. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masood Textile and Arif Habib.
Diversification Opportunities for Masood Textile and Arif Habib
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Masood and Arif is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Masood Textile Mills and Arif Habib in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arif Habib and Masood Textile 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 Masood Textile Mills are associated (or correlated) with Arif Habib. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arif Habib has no effect on the direction of Masood Textile i.e., Masood Textile and Arif Habib go up and down completely randomly.
Pair Corralation between Masood Textile and Arif Habib
Assuming the 90 days trading horizon Masood Textile is expected to generate 1.07 times less return on investment than Arif Habib. In addition to that, Masood Textile is 1.78 times more volatile than Arif Habib. It trades about 0.05 of its total potential returns per unit of risk. Arif Habib is currently generating about 0.09 per unit of volatility. If you would invest 2,841 in Arif Habib on November 19, 2024 and sell it today you would earn a total of 3,812 from holding Arif Habib or generate 134.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 60.49% |
| Values | Daily Returns |
Masood Textile Mills vs. Arif Habib
Performance |
| Timeline |
| Masood Textile Mills |
| Arif Habib |
Masood Textile and Arif Habib Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masood Textile and Arif Habib
The main advantage of trading using opposite Masood Textile and Arif Habib positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masood Textile position performs unexpectedly, Arif Habib 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 Arif Habib will offset losses from the drop in Arif Habib's long position.| Masood Textile vs. National Foods | Masood Textile vs. Nimir Industrial Chemical | Masood Textile vs. Avanceon | Masood Textile vs. Dost Steels |
| Arif Habib vs. Hi Tech Lubricants | Arif Habib vs. ORIX Leasing Pakistan | Arif Habib vs. Engro Polymer Chemicals | Arif Habib vs. Ittehad Chemicals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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