Correlation Between Nestle Pakistan and Al Ghazi
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By analyzing existing cross correlation between Nestle Pakistan and Al Ghazi Tractors, you can compare the effects of market volatilities on Nestle Pakistan and Al Ghazi 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 Nestle Pakistan with a short position of Al Ghazi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nestle Pakistan and Al Ghazi.
Diversification Opportunities for Nestle Pakistan and Al Ghazi
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nestle and AGTL is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nestle Pakistan and Al Ghazi Tractors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Ghazi Tractors and Nestle Pakistan 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 Nestle Pakistan are associated (or correlated) with Al Ghazi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Ghazi Tractors has no effect on the direction of Nestle Pakistan i.e., Nestle Pakistan and Al Ghazi go up and down completely randomly.
Pair Corralation between Nestle Pakistan and Al Ghazi
Assuming the 90 days trading horizon Nestle Pakistan is expected to generate 0.46 times more return on investment than Al Ghazi. However, Nestle Pakistan is 2.15 times less risky than Al Ghazi. It trades about -0.04 of its potential returns per unit of risk. Al Ghazi Tractors is currently generating about -0.1 per unit of risk. If you would invest 662,775 in Nestle Pakistan on August 31, 2024 and sell it today you would lose (4,388) from holding Nestle Pakistan or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nestle Pakistan vs. Al Ghazi Tractors
Performance |
| Timeline |
| Nestle Pakistan |
| Al Ghazi Tractors |
Nestle Pakistan and Al Ghazi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nestle Pakistan and Al Ghazi
The main advantage of trading using opposite Nestle Pakistan and Al Ghazi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nestle Pakistan position performs unexpectedly, Al Ghazi 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 Al Ghazi will offset losses from the drop in Al Ghazi's long position.| Nestle Pakistan vs. Quice Food Industries | Nestle Pakistan vs. Agha Steel Industries | Nestle Pakistan vs. National Foods | Nestle Pakistan vs. Pakistan Aluminium Beverage |
| Al Ghazi vs. Synthetic Products Enterprises | Al Ghazi vs. Aisha Steel Mills | Al Ghazi vs. Sitara Chemical Industries | Al Ghazi vs. Agha Steel Industries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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