Correlation Between National Bank and Agriauto Industries
Can any of the company-specific risk be diversified away by investing in both National Bank and Agriauto Industries 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 National Bank and Agriauto Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and Agriauto Industries, you can compare the effects of market volatilities on National Bank and Agriauto Industries 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 National Bank with a short position of Agriauto Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Agriauto Industries.
Diversification Opportunities for National Bank and Agriauto Industries
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Agriauto is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Agriauto Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agriauto Industries and National Bank 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 National Bank of are associated (or correlated) with Agriauto Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agriauto Industries has no effect on the direction of National Bank i.e., National Bank and Agriauto Industries go up and down completely randomly.
Pair Corralation between National Bank and Agriauto Industries
Assuming the 90 days trading horizon National Bank of is expected to generate 0.79 times more return on investment than Agriauto Industries. However, National Bank of is 1.26 times less risky than Agriauto Industries. It trades about 0.15 of its potential returns per unit of risk. Agriauto Industries is currently generating about 0.06 per unit of risk. If you would invest 1,998 in National Bank of on September 2, 2024 and sell it today you would earn a total of 5,096 from holding National Bank of or generate 255.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.12% |
| Values | Daily Returns |
National Bank of vs. Agriauto Industries
Performance |
| Timeline |
| National Bank |
| Agriauto Industries |
National Bank and Agriauto Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Agriauto Industries
The main advantage of trading using opposite National Bank and Agriauto Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Agriauto Industries 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 Agriauto Industries will offset losses from the drop in Agriauto Industries' long position.| National Bank vs. Masood Textile Mills | National Bank vs. Fauji Foods | National Bank vs. KSB Pumps | National Bank vs. Mari Petroleum |
| Agriauto Industries vs. National Foods | Agriauto Industries vs. Pakistan Telecommunication | Agriauto Industries vs. MCB Investment Manag | Agriauto Industries vs. 786 Investment Limited |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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