Correlation Between Pakistan Oilfields and ITTEFAQ Iron
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By analyzing existing cross correlation between Pakistan Oilfields and ITTEFAQ Iron Industries, you can compare the effects of market volatilities on Pakistan Oilfields and ITTEFAQ Iron 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 Pakistan Oilfields with a short position of ITTEFAQ Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakistan Oilfields and ITTEFAQ Iron.
Diversification Opportunities for Pakistan Oilfields and ITTEFAQ Iron
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pakistan and ITTEFAQ is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pakistan Oilfields and ITTEFAQ Iron Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITTEFAQ Iron Industries and Pakistan Oilfields 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 Pakistan Oilfields are associated (or correlated) with ITTEFAQ Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITTEFAQ Iron Industries has no effect on the direction of Pakistan Oilfields i.e., Pakistan Oilfields and ITTEFAQ Iron go up and down completely randomly.
Pair Corralation between Pakistan Oilfields and ITTEFAQ Iron
Assuming the 90 days trading horizon Pakistan Oilfields is expected to generate 0.21 times more return on investment than ITTEFAQ Iron. However, Pakistan Oilfields is 4.86 times less risky than ITTEFAQ Iron. It trades about 0.08 of its potential returns per unit of risk. ITTEFAQ Iron Industries is currently generating about -0.11 per unit of risk. If you would invest 63,560 in Pakistan Oilfields on November 4, 2024 and sell it today you would earn a total of 945.00 from holding Pakistan Oilfields or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pakistan Oilfields vs. ITTEFAQ Iron Industries
Performance |
| Timeline |
| Pakistan Oilfields |
| ITTEFAQ Iron Industries |
Pakistan Oilfields and ITTEFAQ Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pakistan Oilfields and ITTEFAQ Iron
The main advantage of trading using opposite Pakistan Oilfields and ITTEFAQ Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pakistan Oilfields position performs unexpectedly, ITTEFAQ Iron 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 ITTEFAQ Iron will offset losses from the drop in ITTEFAQ Iron's long position.| Pakistan Oilfields vs. IGI Life Insurance | Pakistan Oilfields vs. Pak Datacom | Pakistan Oilfields vs. Nimir Industrial Chemical | Pakistan Oilfields vs. Shaheen Insurance |
| ITTEFAQ Iron vs. Crescent Star Insurance | ITTEFAQ Iron vs. Quice Food Industries | ITTEFAQ Iron vs. 786 Investment Limited | ITTEFAQ Iron vs. United 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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