Correlation Between Murree Brewery and Agha Steel
Can any of the company-specific risk be diversified away by investing in both Murree Brewery and Agha Steel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Murree Brewery and Agha Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murree Brewery and Agha Steel Industries, you can compare the effects of market volatilities on Murree Brewery and Agha Steel 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 Murree Brewery with a short position of Agha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murree Brewery and Agha Steel.
Diversification Opportunities for Murree Brewery and Agha Steel
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Murree and Agha is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Murree Brewery and Agha Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agha Steel Industries and Murree Brewery 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 Murree Brewery are associated (or correlated) with Agha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agha Steel Industries has no effect on the direction of Murree Brewery i.e., Murree Brewery and Agha Steel go up and down completely randomly.
Pair Corralation between Murree Brewery and Agha Steel
Assuming the 90 days trading horizon Murree Brewery is expected to generate 0.71 times more return on investment than Agha Steel. However, Murree Brewery is 1.42 times less risky than Agha Steel. It trades about 0.13 of its potential returns per unit of risk. Agha Steel Industries is currently generating about -0.27 per unit of risk. If you would invest 78,255 in Murree Brewery on November 5, 2024 and sell it today you would earn a total of 2,260 from holding Murree Brewery or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Murree Brewery vs. Agha Steel Industries
Performance |
| Timeline |
| Murree Brewery |
| Agha Steel Industries |
Murree Brewery and Agha Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murree Brewery and Agha Steel
The main advantage of trading using opposite Murree Brewery and Agha Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murree Brewery position performs unexpectedly, Agha Steel 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 Agha Steel will offset losses from the drop in Agha Steel's long position.| Murree Brewery vs. Habib Insurance | Murree Brewery vs. Ghandhara Automobile | Murree Brewery vs. Shadab Textile Mills | Murree Brewery vs. Century Insurance |
| Agha Steel vs. Wah Nobel Chemicals | Agha Steel vs. JS Investments | Agha Steel vs. Nimir Industrial Chemical | Agha Steel vs. NetSol Technologies |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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