Correlation Between Masood Textile and Habib Insurance
Can any of the company-specific risk be diversified away by investing in both Masood Textile and Habib Insurance 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 Habib Insurance 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 Habib Insurance, you can compare the effects of market volatilities on Masood Textile and Habib 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 Masood Textile with a short position of Habib Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masood Textile and Habib Insurance.
Diversification Opportunities for Masood Textile and Habib Insurance
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Masood and Habib is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Masood Textile Mills and Habib Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Insurance 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 Habib Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Insurance has no effect on the direction of Masood Textile i.e., Masood Textile and Habib Insurance go up and down completely randomly.
Pair Corralation between Masood Textile and Habib Insurance
Assuming the 90 days trading horizon Masood Textile Mills is expected to under-perform the Habib Insurance. In addition to that, Masood Textile is 2.9 times more volatile than Habib Insurance. It trades about -0.01 of its total potential returns per unit of risk. Habib Insurance is currently generating about 0.11 per unit of volatility. If you would invest 891.00 in Habib Insurance on November 27, 2024 and sell it today you would earn a total of 32.00 from holding Habib Insurance or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Masood Textile Mills vs. Habib Insurance
Performance |
| Timeline |
| Masood Textile Mills |
| Habib Insurance |
Masood Textile and Habib Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masood Textile and Habib Insurance
The main advantage of trading using opposite Masood Textile and Habib Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masood Textile position performs unexpectedly, Habib 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 Habib Insurance will offset losses from the drop in Habib Insurance's long position.| Masood Textile vs. Pakistan Reinsurance | Masood Textile vs. United Insurance | Masood Textile vs. WorldCall Telecom | Masood Textile vs. Universal Insurance |
| Habib Insurance vs. Adamjee Insurance | Habib Insurance vs. Premier Insurance | Habib Insurance vs. Honda Atlas Cars | Habib Insurance vs. Shifa International Hospitals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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