Correlation Between Murree Brewery and JS Investments
Can any of the company-specific risk be diversified away by investing in both Murree Brewery and JS Investments 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 JS Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murree Brewery and JS Investments, you can compare the effects of market volatilities on Murree Brewery and JS Investments 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 JS Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murree Brewery and JS Investments.
Diversification Opportunities for Murree Brewery and JS Investments
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Murree and JSIL is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Murree Brewery and JS Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Investments 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 JS Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Investments has no effect on the direction of Murree Brewery i.e., Murree Brewery and JS Investments go up and down completely randomly.
Pair Corralation between Murree Brewery and JS Investments
Assuming the 90 days trading horizon Murree Brewery is expected to generate 0.58 times more return on investment than JS Investments. However, Murree Brewery is 1.72 times less risky than JS Investments. It trades about 0.19 of its potential returns per unit of risk. JS Investments is currently generating about 0.02 per unit of risk. If you would invest 59,745 in Murree Brewery on August 28, 2024 and sell it today you would earn a total of 4,525 from holding Murree Brewery or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Murree Brewery vs. JS Investments
Performance |
| Timeline |
| Murree Brewery |
| JS Investments |
Murree Brewery and JS Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murree Brewery and JS Investments
The main advantage of trading using opposite Murree Brewery and JS Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murree Brewery position performs unexpectedly, JS Investments 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 JS Investments will offset losses from the drop in JS Investments' long position.| Murree Brewery vs. Habib Insurance | Murree Brewery vs. Century Insurance | Murree Brewery vs. Reliance Weaving Mills | Murree Brewery vs. Media Times |
| JS Investments vs. Askari Bank | JS Investments vs. Orient Rental Modaraba | JS Investments vs. Shaheen Insurance | JS Investments vs. United 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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