Correlation Between Mughal Iron and Packages
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By analyzing existing cross correlation between Mughal Iron Steel and Packages, you can compare the effects of market volatilities on Mughal Iron and Packages 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 Packages. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mughal Iron and Packages.
Diversification Opportunities for Mughal Iron and Packages
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mughal and Packages is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mughal Iron Steel and Packages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packages 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 Packages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packages has no effect on the direction of Mughal Iron i.e., Mughal Iron and Packages go up and down completely randomly.
Pair Corralation between Mughal Iron and Packages
Assuming the 90 days trading horizon Mughal Iron is expected to generate 5.21 times less return on investment than Packages. In addition to that, Mughal Iron is 1.13 times more volatile than Packages. It trades about 0.02 of its total potential returns per unit of risk. Packages is currently generating about 0.13 per unit of volatility. If you would invest 44,435 in Packages on October 26, 2024 and sell it today you would earn a total of 10,250 from holding Packages or generate 23.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mughal Iron Steel vs. Packages
Performance |
| Timeline |
| Mughal Iron Steel |
| Packages |
Mughal Iron and Packages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mughal Iron and Packages
The main advantage of trading using opposite Mughal Iron and Packages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mughal Iron position performs unexpectedly, Packages 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 Packages will offset losses from the drop in Packages' long position.| Mughal Iron vs. Atlas Insurance | Mughal Iron vs. Fauji Foods | Mughal Iron vs. Habib Insurance | Mughal Iron vs. EFU General Insurance |
| Packages vs. IGI Life Insurance | Packages vs. EFU General Insurance | Packages vs. Ghandhara Automobile | Packages vs. TPL 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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