Correlation Between Pak Gulf and Air Link
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By analyzing existing cross correlation between Pak Gulf Leasing and Air Link Communication, you can compare the effects of market volatilities on Pak Gulf and Air Link 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 Pak Gulf with a short position of Air Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pak Gulf and Air Link.
Diversification Opportunities for Pak Gulf and Air Link
Excellent diversification
The 3 months correlation between Pak and Air is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pak Gulf Leasing and Air Link Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Link Communication and Pak Gulf 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 Pak Gulf Leasing are associated (or correlated) with Air Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Link Communication has no effect on the direction of Pak Gulf i.e., Pak Gulf and Air Link go up and down completely randomly.
Pair Corralation between Pak Gulf and Air Link
Assuming the 90 days trading horizon Pak Gulf Leasing is expected to generate 1.53 times more return on investment than Air Link. However, Pak Gulf is 1.53 times more volatile than Air Link Communication. It trades about 0.12 of its potential returns per unit of risk. Air Link Communication is currently generating about 0.16 per unit of risk. If you would invest 672.00 in Pak Gulf Leasing on August 29, 2024 and sell it today you would earn a total of 463.00 from holding Pak Gulf Leasing or generate 68.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.52% |
| Values | Daily Returns |
Pak Gulf Leasing vs. Air Link Communication
Performance |
| Timeline |
| Pak Gulf Leasing |
| Air Link Communication |
Pak Gulf and Air Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pak Gulf and Air Link
The main advantage of trading using opposite Pak Gulf and Air Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pak Gulf position performs unexpectedly, Air Link 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 Air Link will offset losses from the drop in Air Link's long position.| Pak Gulf vs. Masood Textile Mills | Pak Gulf vs. Fauji Foods | Pak Gulf vs. KSB Pumps | Pak Gulf vs. Mari Petroleum |
| Air Link vs. Habib Insurance | Air Link vs. Century Insurance | Air Link vs. Reliance Weaving Mills | Air Link vs. Media Times |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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