Correlation Between 1 Year and MCB Bank
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By analyzing existing cross correlation between 1 Year GIS and MCB Bank, you can compare the effects of market volatilities on 1 Year and MCB Bank 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 1 Year with a short position of MCB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1 Year and MCB Bank.
Diversification Opportunities for 1 Year and MCB Bank
Very poor diversification
The 3 months correlation between P01GIS090525 and MCB is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding 1 Year GIS and MCB Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCB Bank and 1 Year 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 1 Year GIS are associated (or correlated) with MCB Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCB Bank has no effect on the direction of 1 Year i.e., 1 Year and MCB Bank go up and down completely randomly.
Pair Corralation between 1 Year and MCB Bank
Assuming the 90 days trading horizon 1 Year is expected to generate 2.46 times less return on investment than MCB Bank. But when comparing it to its historical volatility, 1 Year GIS is 9.34 times less risky than MCB Bank. It trades about 0.6 of its potential returns per unit of risk. MCB Bank is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 8,212 in MCB Bank on September 4, 2024 and sell it today you would earn a total of 19,281 from holding MCB Bank or generate 234.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 25.98% |
| Values | Daily Returns |
1 Year GIS vs. MCB Bank
Performance |
| Timeline |
| 1 Year GIS |
| MCB Bank |
1 Year and MCB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1 Year and MCB Bank
The main advantage of trading using opposite 1 Year and MCB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1 Year position performs unexpectedly, MCB Bank 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 MCB Bank will offset losses from the drop in MCB Bank's long position.| 1 Year vs. MCB Bank | 1 Year vs. WorldCall Telecom | 1 Year vs. Pakistan Aluminium Beverage | 1 Year vs. Bank of Punjab |
| MCB Bank vs. Masood Textile Mills | MCB Bank vs. Fauji Foods | MCB Bank vs. KSB Pumps | MCB Bank vs. Mari Petroleum |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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