Correlation Between Punjab Sind and Page Industries

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Can any of the company-specific risk be diversified away by investing in both Punjab Sind and Page Industries 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 Punjab Sind and Page Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Punjab Sind Bank and Page Industries Limited, you can compare the effects of market volatilities on Punjab Sind and Page Industries 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 Punjab Sind with a short position of Page Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Punjab Sind and Page Industries.

Diversification Opportunities for Punjab Sind and Page Industries

-0.23
  Correlation Coefficient

Very good diversification

The 3 months correlation between Punjab and Page is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Punjab Sind Bank and Page Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Page Industries and Punjab Sind 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 Punjab Sind Bank are associated (or correlated) with Page Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Page Industries has no effect on the direction of Punjab Sind i.e., Punjab Sind and Page Industries go up and down completely randomly.

Pair Corralation between Punjab Sind and Page Industries

Assuming the 90 days trading horizon Punjab Sind Bank is expected to generate 2.2 times more return on investment than Page Industries. However, Punjab Sind is 2.2 times more volatile than Page Industries Limited. It trades about 0.04 of its potential returns per unit of risk. Page Industries Limited is currently generating about 0.03 per unit of risk. If you would invest  3,315  in Punjab Sind Bank on September 20, 2024 and sell it today you would earn a total of  1,764  from holding Punjab Sind Bank or generate 53.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.39%
ValuesDaily Returns

Punjab Sind Bank  vs.  Page Industries Limited

 Performance 
       Timeline  
Punjab Sind Bank 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Punjab Sind Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Punjab Sind is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Page Industries 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Page Industries Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward indicators, Page Industries exhibited solid returns over the last few months and may actually be approaching a breakup point.

Punjab Sind and Page Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Punjab Sind and Page Industries

The main advantage of trading using opposite Punjab Sind and Page Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Punjab Sind position performs unexpectedly, Page Industries 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 Page Industries will offset losses from the drop in Page Industries' long position.
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The idea behind Punjab Sind Bank and Page Industries Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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