Correlation Between Shadab Textile and Media Times
Can any of the company-specific risk be diversified away by investing in both Shadab Textile and Media Times 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 Shadab Textile and Media Times into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shadab Textile Mills and Media Times, you can compare the effects of market volatilities on Shadab Textile and Media Times 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 Shadab Textile with a short position of Media Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shadab Textile and Media Times.
Diversification Opportunities for Shadab Textile and Media Times
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shadab and Media is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shadab Textile Mills and Media Times in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Times and Shadab Textile 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 Shadab Textile Mills are associated (or correlated) with Media Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Times has no effect on the direction of Shadab Textile i.e., Shadab Textile and Media Times go up and down completely randomly.
Pair Corralation between Shadab Textile and Media Times
Assuming the 90 days trading horizon Shadab Textile Mills is expected to generate 0.83 times more return on investment than Media Times. However, Shadab Textile Mills is 1.21 times less risky than Media Times. It trades about 0.06 of its potential returns per unit of risk. Media Times is currently generating about 0.03 per unit of risk. If you would invest 1,283 in Shadab Textile Mills on November 5, 2024 and sell it today you would earn a total of 874.00 from holding Shadab Textile Mills or generate 68.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.88% |
| Values | Daily Returns |
Shadab Textile Mills vs. Media Times
Performance |
| Timeline |
| Shadab Textile Mills |
| Media Times |
Shadab Textile and Media Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shadab Textile and Media Times
The main advantage of trading using opposite Shadab Textile and Media Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shadab Textile position performs unexpectedly, Media Times 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 Media Times will offset losses from the drop in Media Times' long position.| Shadab Textile vs. Big Bird Foods | Shadab Textile vs. Bawany Air Products | Shadab Textile vs. Pakistan Telecommunication | Shadab Textile vs. MCB Investment Manag |
| Media Times vs. Big Bird Foods | Media Times vs. Pakistan Telecommunication | Media Times vs. Dost Steels | Media Times vs. Mughal Iron Steel |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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