Correlation Between Mughal Iron and Hinopak Motors
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By analyzing existing cross correlation between Mughal Iron Steel and Hinopak Motors, you can compare the effects of market volatilities on Mughal Iron and Hinopak Motors 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 Hinopak Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mughal Iron and Hinopak Motors.
Diversification Opportunities for Mughal Iron and Hinopak Motors
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mughal and Hinopak is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mughal Iron Steel and Hinopak Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hinopak Motors 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 Hinopak Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hinopak Motors has no effect on the direction of Mughal Iron i.e., Mughal Iron and Hinopak Motors go up and down completely randomly.
Pair Corralation between Mughal Iron and Hinopak Motors
Assuming the 90 days trading horizon Mughal Iron is expected to generate 1.34 times less return on investment than Hinopak Motors. But when comparing it to its historical volatility, Mughal Iron Steel is 1.14 times less risky than Hinopak Motors. It trades about 0.06 of its potential returns per unit of risk. Hinopak Motors is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 22,254 in Hinopak Motors on September 12, 2024 and sell it today you would earn a total of 19,795 from holding Hinopak Motors or generate 88.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.81% |
| Values | Daily Returns |
Mughal Iron Steel vs. Hinopak Motors
Performance |
| Timeline |
| Mughal Iron Steel |
| Hinopak Motors |
Mughal Iron and Hinopak Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mughal Iron and Hinopak Motors
The main advantage of trading using opposite Mughal Iron and Hinopak Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mughal Iron position performs unexpectedly, Hinopak Motors 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 Hinopak Motors will offset losses from the drop in Hinopak Motors' long position.| Mughal Iron vs. Nimir Industrial Chemical | Mughal Iron vs. EFU General Insurance | Mughal Iron vs. Beco Steel | Mughal Iron vs. Century Insurance |
| Hinopak Motors vs. Mughal Iron Steel | Hinopak Motors vs. East West Insurance | Hinopak Motors vs. Adamjee Insurance | Hinopak Motors vs. Reliance Insurance Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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