Correlation Between Mughal Iron and Ghandhara Automobile
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By analyzing existing cross correlation between Mughal Iron Steel and Ghandhara Automobile, you can compare the effects of market volatilities on Mughal Iron and Ghandhara Automobile 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 Ghandhara Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mughal Iron and Ghandhara Automobile.
Diversification Opportunities for Mughal Iron and Ghandhara Automobile
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mughal and Ghandhara is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mughal Iron Steel and Ghandhara Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ghandhara Automobile 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 Ghandhara Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ghandhara Automobile has no effect on the direction of Mughal Iron i.e., Mughal Iron and Ghandhara Automobile go up and down completely randomly.
Pair Corralation between Mughal Iron and Ghandhara Automobile
Assuming the 90 days trading horizon Mughal Iron Steel is expected to under-perform the Ghandhara Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Mughal Iron Steel is 2.47 times less risky than Ghandhara Automobile. The stock trades about -0.15 of its potential returns per unit of risk. The Ghandhara Automobile is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 30,314 in Ghandhara Automobile on November 4, 2024 and sell it today you would earn a total of 16,490 from holding Ghandhara Automobile or generate 54.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mughal Iron Steel vs. Ghandhara Automobile
Performance |
| Timeline |
| Mughal Iron Steel |
| Ghandhara Automobile |
Mughal Iron and Ghandhara Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mughal Iron and Ghandhara Automobile
The main advantage of trading using opposite Mughal Iron and Ghandhara Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mughal Iron position performs unexpectedly, Ghandhara Automobile 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 Ghandhara Automobile will offset losses from the drop in Ghandhara Automobile's long position.| Mughal Iron vs. Crescent Star Insurance | Mughal Iron vs. East West Insurance | Mughal Iron vs. Jubilee Life Insurance | Mughal Iron vs. Ittehad Chemicals |
| Ghandhara Automobile vs. Universal Insurance | Ghandhara Automobile vs. EFU General Insurance | Ghandhara Automobile vs. Askari Bank | Ghandhara Automobile vs. United Insurance |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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