Correlation Between Premier Insurance and Pakistan Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Premier Insurance and Pakistan Telecommunicatio 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 Premier Insurance and Pakistan Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Insurance and Pakistan Telecommunication, you can compare the effects of market volatilities on Premier Insurance and Pakistan Telecommunicatio 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 Premier Insurance with a short position of Pakistan Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Insurance and Pakistan Telecommunicatio.
Diversification Opportunities for Premier Insurance and Pakistan Telecommunicatio
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Premier and Pakistan is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Premier Insurance and Pakistan Telecommunication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Telecommunicatio and Premier Insurance 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 Premier Insurance are associated (or correlated) with Pakistan Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Telecommunicatio has no effect on the direction of Premier Insurance i.e., Premier Insurance and Pakistan Telecommunicatio go up and down completely randomly.
Pair Corralation between Premier Insurance and Pakistan Telecommunicatio
Assuming the 90 days trading horizon Premier Insurance is expected to under-perform the Pakistan Telecommunicatio. In addition to that, Premier Insurance is 1.28 times more volatile than Pakistan Telecommunication. It trades about -0.09 of its total potential returns per unit of risk. Pakistan Telecommunication is currently generating about 0.2 per unit of volatility. If you would invest 1,558 in Pakistan Telecommunication on August 28, 2024 and sell it today you would earn a total of 223.00 from holding Pakistan Telecommunication or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Premier Insurance vs. Pakistan Telecommunication
Performance |
| Timeline |
| Premier Insurance |
| Pakistan Telecommunicatio |
Premier Insurance and Pakistan Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Insurance and Pakistan Telecommunicatio
The main advantage of trading using opposite Premier Insurance and Pakistan Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Insurance position performs unexpectedly, Pakistan Telecommunicatio 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 Pakistan Telecommunicatio will offset losses from the drop in Pakistan Telecommunicatio's long position.| Premier Insurance vs. Habib Bank | Premier Insurance vs. National Bank of | Premier Insurance vs. United Bank | Premier Insurance vs. MCB Bank |
| Pakistan Telecommunicatio vs. Masood Textile Mills | Pakistan Telecommunicatio vs. Fauji Foods | Pakistan Telecommunicatio vs. KSB Pumps | Pakistan Telecommunicatio 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| 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 | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |