Correlation Between Pakistan Petroleum and ITTEFAQ Iron
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By analyzing existing cross correlation between Pakistan Petroleum and ITTEFAQ Iron Industries, you can compare the effects of market volatilities on Pakistan Petroleum 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 Petroleum with a short position of ITTEFAQ Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakistan Petroleum and ITTEFAQ Iron.
Diversification Opportunities for Pakistan Petroleum and ITTEFAQ Iron
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pakistan and ITTEFAQ is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pakistan Petroleum 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 Petroleum 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 Petroleum 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 Petroleum i.e., Pakistan Petroleum and ITTEFAQ Iron go up and down completely randomly.
Pair Corralation between Pakistan Petroleum and ITTEFAQ Iron
Assuming the 90 days trading horizon Pakistan Petroleum is expected to generate 0.81 times more return on investment than ITTEFAQ Iron. However, Pakistan Petroleum is 1.24 times less risky than ITTEFAQ Iron. It trades about 0.1 of its potential returns per unit of risk. ITTEFAQ Iron Industries is currently generating about 0.02 per unit of risk. If you would invest 4,964 in Pakistan Petroleum on August 28, 2024 and sell it today you would earn a total of 10,443 from holding Pakistan Petroleum or generate 210.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Pakistan Petroleum vs. ITTEFAQ Iron Industries
Performance |
| Timeline |
| Pakistan Petroleum |
| ITTEFAQ Iron Industries |
Pakistan Petroleum and ITTEFAQ Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pakistan Petroleum and ITTEFAQ Iron
The main advantage of trading using opposite Pakistan Petroleum and ITTEFAQ Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pakistan Petroleum 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 Petroleum vs. Avanceon | Pakistan Petroleum vs. Escorts Investment Bank | Pakistan Petroleum vs. NetSol Technologies | Pakistan Petroleum vs. Adamjee Insurance |
| ITTEFAQ Iron vs. International Steels | ITTEFAQ Iron vs. Ghandhara Automobile | ITTEFAQ Iron vs. 786 Investment Limited | ITTEFAQ Iron vs. JS Investments |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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