Correlation Between Pakistan State and Mughal Iron
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By analyzing existing cross correlation between Pakistan State Oil and Mughal Iron Steel, you can compare the effects of market volatilities on Pakistan State and Mughal 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 State with a short position of Mughal Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakistan State and Mughal Iron.
Diversification Opportunities for Pakistan State and Mughal Iron
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pakistan and Mughal is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pakistan State Oil and Mughal Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mughal Iron Steel and Pakistan State 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 State Oil are associated (or correlated) with Mughal Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mughal Iron Steel has no effect on the direction of Pakistan State i.e., Pakistan State and Mughal Iron go up and down completely randomly.
Pair Corralation between Pakistan State and Mughal Iron
Assuming the 90 days trading horizon Pakistan State Oil is expected to generate 0.9 times more return on investment than Mughal Iron. However, Pakistan State Oil is 1.11 times less risky than Mughal Iron. It trades about 0.33 of its potential returns per unit of risk. Mughal Iron Steel is currently generating about -0.16 per unit of risk. If you would invest 23,054 in Pakistan State Oil on August 30, 2024 and sell it today you would earn a total of 5,533 from holding Pakistan State Oil or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pakistan State Oil vs. Mughal Iron Steel
Performance |
| Timeline |
| Pakistan State Oil |
| Mughal Iron Steel |
Pakistan State and Mughal Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pakistan State and Mughal Iron
The main advantage of trading using opposite Pakistan State and Mughal Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pakistan State position performs unexpectedly, Mughal 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 Mughal Iron will offset losses from the drop in Mughal Iron's long position.| Pakistan State vs. Masood Textile Mills | Pakistan State vs. Fauji Foods | Pakistan State vs. KSB Pumps | Pakistan State vs. Mari Petroleum |
| Mughal Iron vs. Dost Steels | Mughal Iron vs. WorldCall Telecom | Mughal Iron vs. Reliance Insurance Co | Mughal Iron vs. Aisha Steel 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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