Correlation Between Pakistan Synthetics and JS Investments
Can any of the company-specific risk be diversified away by investing in both Pakistan Synthetics and JS Investments 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 Pakistan Synthetics and JS Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pakistan Synthetics and JS Investments, you can compare the effects of market volatilities on Pakistan Synthetics and JS Investments 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 Synthetics with a short position of JS Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakistan Synthetics and JS Investments.
Diversification Opportunities for Pakistan Synthetics and JS Investments
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pakistan and JSIL is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pakistan Synthetics and JS Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Investments and Pakistan Synthetics 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 Synthetics are associated (or correlated) with JS Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Investments has no effect on the direction of Pakistan Synthetics i.e., Pakistan Synthetics and JS Investments go up and down completely randomly.
Pair Corralation between Pakistan Synthetics and JS Investments
Assuming the 90 days trading horizon Pakistan Synthetics is expected to generate 0.94 times more return on investment than JS Investments. However, Pakistan Synthetics is 1.07 times less risky than JS Investments. It trades about 0.22 of its potential returns per unit of risk. JS Investments is currently generating about 0.12 per unit of risk. If you would invest 2,735 in Pakistan Synthetics on September 13, 2024 and sell it today you would earn a total of 465.00 from holding Pakistan Synthetics or generate 17.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pakistan Synthetics vs. JS Investments
Performance |
| Timeline |
| Pakistan Synthetics |
| JS Investments |
Pakistan Synthetics and JS Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pakistan Synthetics and JS Investments
The main advantage of trading using opposite Pakistan Synthetics and JS Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pakistan Synthetics position performs unexpectedly, JS Investments 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 JS Investments will offset losses from the drop in JS Investments' long position.| Pakistan Synthetics vs. Masood Textile Mills | Pakistan Synthetics vs. Fauji Foods | Pakistan Synthetics vs. KSB Pumps | Pakistan Synthetics vs. Mari Petroleum |
| JS Investments vs. Metropolitan Steel Corp | JS Investments vs. Premier Insurance | JS Investments vs. Century Insurance | JS Investments vs. Beco Steel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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