Correlation Between Roshan Packages and Tata Textile
Can any of the company-specific risk be diversified away by investing in both Roshan Packages and Tata Textile 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 Tata Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roshan Packages and Tata Textile Mills, you can compare the effects of market volatilities on Roshan Packages and Tata Textile 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 Tata Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roshan Packages and Tata Textile.
Diversification Opportunities for Roshan Packages and Tata Textile
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Roshan and Tata is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Roshan Packages and Tata Textile Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tata Textile Mills 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 Tata Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tata Textile Mills has no effect on the direction of Roshan Packages i.e., Roshan Packages and Tata Textile go up and down completely randomly.
Pair Corralation between Roshan Packages and Tata Textile
Assuming the 90 days trading horizon Roshan Packages is expected to generate 0.98 times more return on investment than Tata Textile. However, Roshan Packages is 1.02 times less risky than Tata Textile. It trades about 0.11 of its potential returns per unit of risk. Tata Textile Mills is currently generating about 0.01 per unit of risk. If you would invest 1,367 in Roshan Packages on September 13, 2024 and sell it today you would earn a total of 633.00 from holding Roshan Packages or generate 46.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.78% |
| Values | Daily Returns |
Roshan Packages vs. Tata Textile Mills
Performance |
| Timeline |
| Roshan Packages |
| Tata Textile Mills |
Roshan Packages and Tata Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roshan Packages and Tata Textile
The main advantage of trading using opposite Roshan Packages and Tata Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roshan Packages position performs unexpectedly, Tata Textile 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 Tata Textile will offset losses from the drop in Tata Textile's long position.| Roshan Packages vs. Oil and Gas | Roshan Packages vs. Pakistan State Oil | Roshan Packages vs. Pakistan Petroleum | Roshan Packages vs. Fauji Fertilizer |
| Tata Textile vs. Roshan Packages | Tata Textile vs. Nimir Industrial Chemical | Tata Textile vs. Hi Tech Lubricants | Tata Textile vs. Big Bird 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |