Correlation Between Masood Textile and Ghani Value
Can any of the company-specific risk be diversified away by investing in both Masood Textile and Ghani Value 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 Ghani Value 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 Ghani Value Glass, you can compare the effects of market volatilities on Masood Textile and Ghani Value 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 Ghani Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masood Textile and Ghani Value.
Diversification Opportunities for Masood Textile and Ghani Value
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Masood and Ghani is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Masood Textile Mills and Ghani Value Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ghani Value Glass 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 Ghani Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ghani Value Glass has no effect on the direction of Masood Textile i.e., Masood Textile and Ghani Value go up and down completely randomly.
Pair Corralation between Masood Textile and Ghani Value
Assuming the 90 days trading horizon Masood Textile Mills is expected to generate 1.8 times more return on investment than Ghani Value. However, Masood Textile is 1.8 times more volatile than Ghani Value Glass. It trades about 0.38 of its potential returns per unit of risk. Ghani Value Glass is currently generating about 0.21 per unit of risk. If you would invest 4,170 in Masood Textile Mills on September 4, 2024 and sell it today you would earn a total of 1,161 from holding Masood Textile Mills or generate 27.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Masood Textile Mills vs. Ghani Value Glass
Performance |
| Timeline |
| Masood Textile Mills |
| Ghani Value Glass |
Masood Textile and Ghani Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masood Textile and Ghani Value
The main advantage of trading using opposite Masood Textile and Ghani Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masood Textile position performs unexpectedly, Ghani Value 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 Ghani Value will offset losses from the drop in Ghani Value's long position.| Masood Textile vs. Engro Polymer Chemicals | Masood Textile vs. Air Link Communication | Masood Textile vs. Aisha Steel Mills | Masood Textile vs. Mughal Iron Steel |
| Ghani Value vs. Masood Textile Mills | Ghani Value vs. Fauji Foods | Ghani Value vs. KSB Pumps | Ghani Value 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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