Correlation Between Masood Textile and IGI Life
Can any of the company-specific risk be diversified away by investing in both Masood Textile and IGI Life 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 IGI Life 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 IGI Life Insurance, you can compare the effects of market volatilities on Masood Textile and IGI Life 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 IGI Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masood Textile and IGI Life.
Diversification Opportunities for Masood Textile and IGI Life
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Masood and IGI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Masood Textile Mills and IGI Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGI Life 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 IGI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGI Life Insurance has no effect on the direction of Masood Textile i.e., Masood Textile and IGI Life go up and down completely randomly.
Pair Corralation between Masood Textile and IGI Life
Assuming the 90 days trading horizon Masood Textile Mills is expected to generate 1.13 times more return on investment than IGI Life. However, Masood Textile is 1.13 times more volatile than IGI Life Insurance. It trades about 0.21 of its potential returns per unit of risk. IGI Life Insurance is currently generating about -0.23 per unit of risk. If you would invest 4,981 in Masood Textile Mills on October 28, 2024 and sell it today you would earn a total of 535.00 from holding Masood Textile Mills or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Masood Textile Mills vs. IGI Life Insurance
Performance |
| Timeline |
| Masood Textile Mills |
| IGI Life Insurance |
Masood Textile and IGI Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masood Textile and IGI Life
The main advantage of trading using opposite Masood Textile and IGI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masood Textile position performs unexpectedly, IGI Life 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 IGI Life will offset losses from the drop in IGI Life's long position.| Masood Textile vs. Jubilee Life Insurance | Masood Textile vs. Quice Food Industries | Masood Textile vs. Pakistan Tobacco | Masood Textile vs. Fateh Sports Wear |
| IGI Life vs. Masood Textile Mills | IGI Life vs. Fauji Foods | IGI Life vs. KSB Pumps | IGI Life 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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