Correlation Between Quice Food and Shifa International
Can any of the company-specific risk be diversified away by investing in both Quice Food and Shifa International 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 Quice Food and Shifa International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quice Food Industries and Shifa International Hospitals, you can compare the effects of market volatilities on Quice Food and Shifa International 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 Quice Food with a short position of Shifa International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quice Food and Shifa International.
Diversification Opportunities for Quice Food and Shifa International
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quice and Shifa is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Quice Food Industries and Shifa International Hospitals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shifa International and Quice Food 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 Quice Food Industries are associated (or correlated) with Shifa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shifa International has no effect on the direction of Quice Food i.e., Quice Food and Shifa International go up and down completely randomly.
Pair Corralation between Quice Food and Shifa International
Assuming the 90 days trading horizon Quice Food is expected to generate 1.49 times less return on investment than Shifa International. In addition to that, Quice Food is 1.52 times more volatile than Shifa International Hospitals. It trades about 0.05 of its total potential returns per unit of risk. Shifa International Hospitals is currently generating about 0.11 per unit of volatility. If you would invest 11,461 in Shifa International Hospitals on August 24, 2024 and sell it today you would earn a total of 26,019 from holding Shifa International Hospitals or generate 227.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.49% |
| Values | Daily Returns |
Quice Food Industries vs. Shifa International Hospitals
Performance |
| Timeline |
| Quice Food Industries |
| Shifa International |
Quice Food and Shifa International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quice Food and Shifa International
The main advantage of trading using opposite Quice Food and Shifa International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quice Food position performs unexpectedly, Shifa International 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 Shifa International will offset losses from the drop in Shifa International's long position.| Quice Food vs. Masood Textile Mills | Quice Food vs. Fauji Foods | Quice Food vs. KSB Pumps | Quice Food vs. Mari Petroleum |
| Shifa International vs. Pakistan State Oil | Shifa International vs. K Electric | Shifa International vs. Oil and Gas | Shifa International vs. Lucky Cement |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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