Correlation Between Orient Rental and Fateh Sports
Can any of the company-specific risk be diversified away by investing in both Orient Rental and Fateh Sports 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 Orient Rental and Fateh Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Rental Modaraba and Fateh Sports Wear, you can compare the effects of market volatilities on Orient Rental and Fateh Sports 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 Orient Rental with a short position of Fateh Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Rental and Fateh Sports.
Diversification Opportunities for Orient Rental and Fateh Sports
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Orient and Fateh is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Orient Rental Modaraba and Fateh Sports Wear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fateh Sports Wear and Orient Rental 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 Orient Rental Modaraba are associated (or correlated) with Fateh Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fateh Sports Wear has no effect on the direction of Orient Rental i.e., Orient Rental and Fateh Sports go up and down completely randomly.
Pair Corralation between Orient Rental and Fateh Sports
Assuming the 90 days trading horizon Orient Rental is expected to generate 2.01 times less return on investment than Fateh Sports. But when comparing it to its historical volatility, Orient Rental Modaraba is 1.61 times less risky than Fateh Sports. It trades about 0.06 of its potential returns per unit of risk. Fateh Sports Wear is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,248 in Fateh Sports Wear on October 25, 2024 and sell it today you would earn a total of 1,609 from holding Fateh Sports Wear or generate 25.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 34.05% |
| Values | Daily Returns |
Orient Rental Modaraba vs. Fateh Sports Wear
Performance |
| Timeline |
| Orient Rental Modaraba |
| Fateh Sports Wear |
Orient Rental and Fateh Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Rental and Fateh Sports
The main advantage of trading using opposite Orient Rental and Fateh Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Rental position performs unexpectedly, Fateh Sports 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 Fateh Sports will offset losses from the drop in Fateh Sports' long position.| Orient Rental vs. Unity Foods | Orient Rental vs. Unilever Pakistan Foods | Orient Rental vs. Metropolitan Steel Corp | Orient Rental vs. Dost Steels |
| Fateh Sports vs. Synthetic Products Enterprises | Fateh Sports vs. Pakistan Synthetics | Fateh Sports vs. JS Investments | Fateh Sports vs. Roshan Packages |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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