Correlation Between Pak Gulf and Atlas Battery
Can any of the company-specific risk be diversified away by investing in both Pak Gulf and Atlas Battery 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 Pak Gulf and Atlas Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pak Gulf Leasing and Atlas Battery, you can compare the effects of market volatilities on Pak Gulf and Atlas Battery 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 Atlas Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pak Gulf and Atlas Battery.
Diversification Opportunities for Pak Gulf and Atlas Battery
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pak and Atlas is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pak Gulf Leasing and Atlas Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Battery 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 Atlas Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Battery has no effect on the direction of Pak Gulf i.e., Pak Gulf and Atlas Battery go up and down completely randomly.
Pair Corralation between Pak Gulf and Atlas Battery
Assuming the 90 days trading horizon Pak Gulf Leasing is expected to generate 1.54 times more return on investment than Atlas Battery. However, Pak Gulf is 1.54 times more volatile than Atlas Battery. It trades about 0.09 of its potential returns per unit of risk. Atlas Battery is currently generating about 0.09 per unit of risk. If you would invest 639.00 in Pak Gulf Leasing on September 12, 2024 and sell it today you would earn a total of 577.00 from holding Pak Gulf Leasing or generate 90.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.53% |
| Values | Daily Returns |
Pak Gulf Leasing vs. Atlas Battery
Performance |
| Timeline |
| Pak Gulf Leasing |
| Atlas Battery |
Pak Gulf and Atlas Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pak Gulf and Atlas Battery
The main advantage of trading using opposite Pak Gulf and Atlas Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pak Gulf position performs unexpectedly, Atlas Battery 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 Atlas Battery will offset losses from the drop in Atlas Battery's long position.| Pak Gulf vs. Packages | Pak Gulf vs. Ghandhara Automobile | Pak Gulf vs. Security Investment Bank | Pak Gulf vs. Agritech |
| Atlas Battery vs. Shaheen Insurance | Atlas Battery vs. Allied Bank | Atlas Battery vs. Pak Gulf Leasing | Atlas Battery vs. Atlas 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |