Correlation Between Orient Rental and Premier Insurance
Can any of the company-specific risk be diversified away by investing in both Orient Rental and Premier Insurance 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 Premier Insurance 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 Premier Insurance, you can compare the effects of market volatilities on Orient Rental and Premier Insurance 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 Premier Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Rental and Premier Insurance.
Diversification Opportunities for Orient Rental and Premier Insurance
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orient and Premier is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Orient Rental Modaraba and Premier Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Insurance 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 Premier Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Insurance has no effect on the direction of Orient Rental i.e., Orient Rental and Premier Insurance go up and down completely randomly.
Pair Corralation between Orient Rental and Premier Insurance
Assuming the 90 days trading horizon Orient Rental Modaraba is expected to generate 0.82 times more return on investment than Premier Insurance. However, Orient Rental Modaraba is 1.21 times less risky than Premier Insurance. It trades about 0.06 of its potential returns per unit of risk. Premier Insurance is currently generating about 0.02 per unit of risk. If you would invest 437.00 in Orient Rental Modaraba on November 5, 2024 and sell it today you would earn a total of 365.00 from holding Orient Rental Modaraba or generate 83.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.39% |
| Values | Daily Returns |
Orient Rental Modaraba vs. Premier Insurance
Performance |
| Timeline |
| Orient Rental Modaraba |
| Premier Insurance |
Orient Rental and Premier Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Rental and Premier Insurance
The main advantage of trading using opposite Orient Rental and Premier Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Rental position performs unexpectedly, Premier Insurance 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 Premier Insurance will offset losses from the drop in Premier Insurance's long position.| Orient Rental vs. Pakistan Synthetics | Orient Rental vs. Allied Bank | Orient Rental vs. Soneri Bank | Orient Rental vs. National Bank of |
| Premier Insurance vs. Soneri Bank | Premier Insurance vs. IGI Life Insurance | Premier Insurance vs. Silkbank | Premier Insurance vs. EFU General 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |