Correlation Between Mughal Iron and Karachi 100
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By analyzing existing cross correlation between Mughal Iron Steel and Karachi 100, you can compare the effects of market volatilities on Mughal Iron and Karachi 100 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 Karachi 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mughal Iron and Karachi 100.
Diversification Opportunities for Mughal Iron and Karachi 100
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mughal and Karachi is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mughal Iron Steel and Karachi 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karachi 100 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 Karachi 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karachi 100 has no effect on the direction of Mughal Iron i.e., Mughal Iron and Karachi 100 go up and down completely randomly.
Pair Corralation between Mughal Iron and Karachi 100
Assuming the 90 days trading horizon Mughal Iron Steel is expected to under-perform the Karachi 100. In addition to that, Mughal Iron is 2.79 times more volatile than Karachi 100. It trades about -0.17 of its total potential returns per unit of risk. Karachi 100 is currently generating about 0.37 per unit of volatility. If you would invest 8,129,213 in Karachi 100 on August 28, 2024 and sell it today you would earn a total of 1,328,203 from holding Karachi 100 or generate 16.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mughal Iron Steel vs. Karachi 100
Performance |
| Timeline |
Mughal Iron and Karachi 100 Volatility Contrast
Predicted Return Density |
| Returns |
Mughal Iron Steel
Pair trading matchups for Mughal Iron
Karachi 100
Pair trading matchups for Karachi 100
Pair Trading with Mughal Iron and Karachi 100
The main advantage of trading using opposite Mughal Iron and Karachi 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mughal Iron position performs unexpectedly, Karachi 100 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 Karachi 100 will offset losses from the drop in Karachi 100's long position.| Mughal Iron vs. Oil and Gas | Mughal Iron vs. Pakistan State Oil | Mughal Iron vs. Pakistan Petroleum | Mughal Iron vs. Engro |
| Karachi 100 vs. Packages | Karachi 100 vs. Security Investment Bank | Karachi 100 vs. Pakistan Aluminium Beverage | Karachi 100 vs. National Foods |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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