Correlation Between Roshan Packages and Packages
Can any of the company-specific risk be diversified away by investing in both Roshan Packages and Packages 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 Packages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roshan Packages and Packages, you can compare the effects of market volatilities on Roshan Packages and Packages 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 Packages. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roshan Packages and Packages.
Diversification Opportunities for Roshan Packages and Packages
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Roshan and Packages is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Roshan Packages and Packages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packages 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 Packages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packages has no effect on the direction of Roshan Packages i.e., Roshan Packages and Packages go up and down completely randomly.
Pair Corralation between Roshan Packages and Packages
Assuming the 90 days trading horizon Roshan Packages is expected to generate 1.16 times less return on investment than Packages. In addition to that, Roshan Packages is 1.42 times more volatile than Packages. It trades about 0.04 of its total potential returns per unit of risk. Packages is currently generating about 0.07 per unit of volatility. If you would invest 32,901 in Packages on August 24, 2024 and sell it today you would earn a total of 23,605 from holding Packages or generate 71.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.38% |
| Values | Daily Returns |
Roshan Packages vs. Packages
Performance |
| Timeline |
| Roshan Packages |
| Packages |
Roshan Packages and Packages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roshan Packages and Packages
The main advantage of trading using opposite Roshan Packages and Packages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roshan Packages position performs unexpectedly, Packages 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 Packages will offset losses from the drop in Packages' long position.| Roshan Packages vs. Masood Textile Mills | Roshan Packages vs. Fauji Foods | Roshan Packages vs. KSB Pumps | Roshan Packages vs. Mari Petroleum |
| Packages vs. EFU General Insurance | Packages vs. Askari General Insurance | Packages vs. Ittehad Chemicals | Packages vs. National Foods |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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