Correlation Between PIA Holding and Premier Insurance
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By analyzing existing cross correlation between PIA Holding and Premier Insurance, you can compare the effects of market volatilities on PIA Holding 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 PIA Holding with a short position of Premier Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIA Holding and Premier Insurance.
Diversification Opportunities for PIA Holding and Premier Insurance
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PIA and Premier is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PIA Holding and Premier Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Insurance and PIA Holding 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 PIA Holding 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 PIA Holding i.e., PIA Holding and Premier Insurance go up and down completely randomly.
Pair Corralation between PIA Holding and Premier Insurance
Assuming the 90 days trading horizon PIA Holding is expected to under-perform the Premier Insurance. But the stock apears to be less risky and, when comparing its historical volatility, PIA Holding is 2.14 times less risky than Premier Insurance. The stock trades about -0.06 of its potential returns per unit of risk. The Premier Insurance is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 549.00 in Premier Insurance on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Premier Insurance or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
PIA Holding vs. Premier Insurance
Performance |
| Timeline |
| PIA Holding |
| Premier Insurance |
PIA Holding and Premier Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIA Holding and Premier Insurance
The main advantage of trading using opposite PIA Holding and Premier Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIA Holding 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.| PIA Holding vs. Reliance Insurance Co | PIA Holding vs. Metropolitan Steel Corp | PIA Holding vs. ITTEFAQ Iron Industries | PIA Holding vs. Jubilee Life Insurance |
| Premier Insurance vs. Matco Foods | Premier Insurance vs. Unilever Pakistan Foods | Premier Insurance vs. Universal Insurance | Premier Insurance vs. Pakistan Telecommunication |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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