Correlation Between Roshan Packages and Crescent Steel
Can any of the company-specific risk be diversified away by investing in both Roshan Packages and Crescent 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 Crescent 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 Crescent Steel Allied, you can compare the effects of market volatilities on Roshan Packages and Crescent 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 Crescent Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roshan Packages and Crescent Steel.
Diversification Opportunities for Roshan Packages and Crescent Steel
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Roshan and Crescent is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Roshan Packages and Crescent Steel Allied in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Steel Allied 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 Crescent Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Steel Allied has no effect on the direction of Roshan Packages i.e., Roshan Packages and Crescent Steel go up and down completely randomly.
Pair Corralation between Roshan Packages and Crescent Steel
Assuming the 90 days trading horizon Roshan Packages is expected to generate 0.93 times more return on investment than Crescent Steel. However, Roshan Packages is 1.08 times less risky than Crescent Steel. It trades about 0.15 of its potential returns per unit of risk. Crescent Steel Allied is currently generating about -0.09 per unit of risk. If you would invest 1,568 in Roshan Packages on September 1, 2024 and sell it today you would earn a total of 171.00 from holding Roshan Packages or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roshan Packages vs. Crescent Steel Allied
Performance |
| Timeline |
| Roshan Packages |
| Crescent Steel Allied |
Roshan Packages and Crescent Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roshan Packages and Crescent Steel
The main advantage of trading using opposite Roshan Packages and Crescent Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roshan Packages position performs unexpectedly, Crescent 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 Crescent Steel will offset losses from the drop in Crescent Steel's long position.| Roshan Packages vs. Data Agro | Roshan Packages vs. Hi Tech Lubricants | Roshan Packages vs. Pakistan Telecommunication | Roshan Packages vs. Adamjee Insurance |
| Crescent Steel vs. Masood Textile Mills | Crescent Steel vs. Fauji Foods | Crescent Steel vs. KSB Pumps | Crescent Steel vs. Mari Petroleum |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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