Correlation Between Pakistan Refinery and Air Link
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By analyzing existing cross correlation between Pakistan Refinery and Air Link Communication, you can compare the effects of market volatilities on Pakistan Refinery and Air Link 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 Refinery with a short position of Air Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakistan Refinery and Air Link.
Diversification Opportunities for Pakistan Refinery and Air Link
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pakistan and Air is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Pakistan Refinery and Air Link Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Link Communication and Pakistan Refinery 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 Refinery are associated (or correlated) with Air Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Link Communication has no effect on the direction of Pakistan Refinery i.e., Pakistan Refinery and Air Link go up and down completely randomly.
Pair Corralation between Pakistan Refinery and Air Link
Assuming the 90 days trading horizon Pakistan Refinery is expected to generate 45.07 times more return on investment than Air Link. However, Pakistan Refinery is 45.07 times more volatile than Air Link Communication. It trades about 0.14 of its potential returns per unit of risk. Air Link Communication is currently generating about 0.13 per unit of risk. If you would invest 1,441 in Pakistan Refinery on September 4, 2024 and sell it today you would earn a total of 1,503 from holding Pakistan Refinery or generate 104.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.59% |
| Values | Daily Returns |
Pakistan Refinery vs. Air Link Communication
Performance |
| Timeline |
| Pakistan Refinery |
| Air Link Communication |
Pakistan Refinery and Air Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pakistan Refinery and Air Link
The main advantage of trading using opposite Pakistan Refinery and Air Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pakistan Refinery position performs unexpectedly, Air Link 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 Air Link will offset losses from the drop in Air Link's long position.| Pakistan Refinery vs. Allied Bank | Pakistan Refinery vs. Jubilee Life Insurance | Pakistan Refinery vs. Soneri Bank | Pakistan Refinery vs. Roshan Packages |
| Air Link vs. Habib Insurance | Air Link vs. Pakistan Refinery | Air Link vs. Century Insurance | Air Link vs. Reliance Weaving Mills |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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