Correlation Between Murree Brewery and Habib Insurance
Can any of the company-specific risk be diversified away by investing in both Murree Brewery and Habib Insurance 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 Habib Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murree Brewery and Habib Insurance, you can compare the effects of market volatilities on Murree Brewery and Habib Insurance 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 Habib Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murree Brewery and Habib Insurance.
Diversification Opportunities for Murree Brewery and Habib Insurance
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Murree and Habib is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Murree Brewery and Habib Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Insurance 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 Habib Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Insurance has no effect on the direction of Murree Brewery i.e., Murree Brewery and Habib Insurance go up and down completely randomly.
Pair Corralation between Murree Brewery and Habib Insurance
Assuming the 90 days trading horizon Murree Brewery is expected to generate 1.21 times less return on investment than Habib Insurance. But when comparing it to its historical volatility, Murree Brewery is 2.25 times less risky than Habib Insurance. It trades about 0.35 of its potential returns per unit of risk. Habib Insurance is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 790.00 in Habib Insurance on October 24, 2024 and sell it today you would earn a total of 139.00 from holding Habib Insurance or generate 17.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Murree Brewery vs. Habib Insurance
Performance |
| Timeline |
| Murree Brewery |
| Habib Insurance |
Murree Brewery and Habib Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murree Brewery and Habib Insurance
The main advantage of trading using opposite Murree Brewery and Habib Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murree Brewery position performs unexpectedly, Habib Insurance 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 Habib Insurance will offset losses from the drop in Habib Insurance's long position.| Murree Brewery vs. Habib Insurance | Murree Brewery vs. Ghandhara Automobile | Murree Brewery vs. Century Insurance | Murree Brewery vs. Reliance Weaving Mills |
| Habib Insurance vs. Fauji Foods | Habib Insurance vs. ORIX Leasing Pakistan | Habib Insurance vs. Jubilee Life Insurance | Habib Insurance vs. Pakistan Reinsurance |
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 CEOs Directory module to screen CEOs from public companies around the world.
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