Correlation Between Roshan Packages and Agha Steel
Can any of the company-specific risk be diversified away by investing in both Roshan Packages and Agha Steel 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 Roshan Packages and Agha Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roshan Packages and Agha Steel Industries, you can compare the effects of market volatilities on Roshan Packages and Agha Steel 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 Roshan Packages with a short position of Agha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roshan Packages and Agha Steel.
Diversification Opportunities for Roshan Packages and Agha Steel
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Roshan and Agha is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Roshan Packages and Agha Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agha Steel Industries and Roshan Packages 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 Roshan Packages are associated (or correlated) with Agha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agha Steel Industries has no effect on the direction of Roshan Packages i.e., Roshan Packages and Agha Steel go up and down completely randomly.
Pair Corralation between Roshan Packages and Agha Steel
Assuming the 90 days trading horizon Roshan Packages is expected to generate 0.93 times more return on investment than Agha Steel. However, Roshan Packages is 1.07 times less risky than Agha Steel. It trades about 0.06 of its potential returns per unit of risk. Agha Steel Industries is currently generating about 0.02 per unit of risk. If you would invest 1,431 in Roshan Packages on August 28, 2024 and sell it today you would earn a total of 267.00 from holding Roshan Packages or generate 18.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roshan Packages vs. Agha Steel Industries
Performance |
| Timeline |
| Roshan Packages |
| Agha Steel Industries |
Roshan Packages and Agha Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roshan Packages and Agha Steel
The main advantage of trading using opposite Roshan Packages and Agha Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roshan Packages position performs unexpectedly, Agha Steel 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 Agha Steel will offset losses from the drop in Agha Steel's long position.| Roshan Packages vs. Masood Textile Mills | Roshan Packages vs. Fauji Foods | Roshan Packages vs. KSB Pumps | Roshan Packages vs. Mari Petroleum |
| Agha Steel vs. Habib Insurance | Agha Steel vs. Century Insurance | Agha Steel vs. Reliance Weaving Mills | Agha Steel vs. Media Times |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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