Correlation Between Nimir Industrial and Ghani Chemical
Can any of the company-specific risk be diversified away by investing in both Nimir Industrial and Ghani Chemical 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 Nimir Industrial and Ghani Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nimir Industrial Chemical and Ghani Chemical Industries, you can compare the effects of market volatilities on Nimir Industrial and Ghani Chemical 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 Nimir Industrial with a short position of Ghani Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nimir Industrial and Ghani Chemical.
Diversification Opportunities for Nimir Industrial and Ghani Chemical
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nimir and Ghani is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nimir Industrial Chemical and Ghani Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ghani Chemical Industries and Nimir Industrial 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 Nimir Industrial Chemical are associated (or correlated) with Ghani Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ghani Chemical Industries has no effect on the direction of Nimir Industrial i.e., Nimir Industrial and Ghani Chemical go up and down completely randomly.
Pair Corralation between Nimir Industrial and Ghani Chemical
Assuming the 90 days trading horizon Nimir Industrial Chemical is expected to generate 1.09 times more return on investment than Ghani Chemical. However, Nimir Industrial is 1.09 times more volatile than Ghani Chemical Industries. It trades about 0.07 of its potential returns per unit of risk. Ghani Chemical Industries is currently generating about 0.0 per unit of risk. If you would invest 6,694 in Nimir Industrial Chemical on August 27, 2024 and sell it today you would earn a total of 6,306 from holding Nimir Industrial Chemical or generate 94.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 86.39% |
| Values | Daily Returns |
Nimir Industrial Chemical vs. Ghani Chemical Industries
Performance |
| Timeline |
| Nimir Industrial Chemical |
| Ghani Chemical Industries |
Nimir Industrial and Ghani Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nimir Industrial and Ghani Chemical
The main advantage of trading using opposite Nimir Industrial and Ghani Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nimir Industrial position performs unexpectedly, Ghani Chemical 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 Ghani Chemical will offset losses from the drop in Ghani Chemical's long position.| Nimir Industrial vs. Unilever Pakistan Foods | Nimir Industrial vs. Hi Tech Lubricants | Nimir Industrial vs. Crescent Star Insurance | Nimir Industrial vs. Honda Atlas Cars |
| Ghani Chemical vs. Adamjee Insurance | Ghani Chemical vs. Atlas Insurance | Ghani Chemical vs. Soneri Bank | Ghani Chemical vs. IBL HealthCare |
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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