Correlation Between Mughal Iron and EFU General
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By analyzing existing cross correlation between Mughal Iron Steel and EFU General Insurance, you can compare the effects of market volatilities on Mughal Iron and EFU General 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 Mughal Iron with a short position of EFU General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mughal Iron and EFU General.
Diversification Opportunities for Mughal Iron and EFU General
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mughal and EFU is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mughal Iron Steel and EFU General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EFU General Insurance and Mughal Iron 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 Mughal Iron Steel are associated (or correlated) with EFU General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EFU General Insurance has no effect on the direction of Mughal Iron i.e., Mughal Iron and EFU General go up and down completely randomly.
Pair Corralation between Mughal Iron and EFU General
Assuming the 90 days trading horizon Mughal Iron Steel is expected to under-perform the EFU General. But the stock apears to be less risky and, when comparing its historical volatility, Mughal Iron Steel is 1.78 times less risky than EFU General. The stock trades about -0.15 of its potential returns per unit of risk. The EFU General Insurance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11,919 in EFU General Insurance on November 30, 2024 and sell it today you would earn a total of 481.00 from holding EFU General Insurance or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mughal Iron Steel vs. EFU General Insurance
Performance |
| Timeline |
| Mughal Iron Steel |
| EFU General Insurance |
Mughal Iron and EFU General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mughal Iron and EFU General
The main advantage of trading using opposite Mughal Iron and EFU General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mughal Iron position performs unexpectedly, EFU General 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 EFU General will offset losses from the drop in EFU General's long position.| Mughal Iron vs. Amreli Steels | Mughal Iron vs. Beco Steel | Mughal Iron vs. JS Investments | Mughal Iron vs. Wah Nobel Chemicals |
| EFU General vs. Lotte Chemical Pakistan | EFU General vs. Big Bird Foods | EFU General vs. Ghandhara Automobile | EFU General vs. JS Investments |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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