Correlation Between Shaheen Insurance and 786 Investment
Can any of the company-specific risk be diversified away by investing in both Shaheen Insurance and 786 Investment 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 Shaheen Insurance and 786 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaheen Insurance and 786 Investment Limited, you can compare the effects of market volatilities on Shaheen Insurance and 786 Investment 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 Shaheen Insurance with a short position of 786 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and 786 Investment.
Diversification Opportunities for Shaheen Insurance and 786 Investment
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaheen and 786 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and 786 Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 786 Investment and Shaheen Insurance 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 Shaheen Insurance are associated (or correlated) with 786 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 786 Investment has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and 786 Investment go up and down completely randomly.
Pair Corralation between Shaheen Insurance and 786 Investment
Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 0.86 times more return on investment than 786 Investment. However, Shaheen Insurance is 1.17 times less risky than 786 Investment. It trades about 0.1 of its potential returns per unit of risk. 786 Investment Limited is currently generating about 0.07 per unit of risk. If you would invest 335.00 in Shaheen Insurance on August 28, 2024 and sell it today you would earn a total of 225.00 from holding Shaheen Insurance or generate 67.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.86% |
| Values | Daily Returns |
Shaheen Insurance vs. 786 Investment Limited
Performance |
| Timeline |
| Shaheen Insurance |
| 786 Investment |
Shaheen Insurance and 786 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaheen Insurance and 786 Investment
The main advantage of trading using opposite Shaheen Insurance and 786 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaheen Insurance position performs unexpectedly, 786 Investment 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 786 Investment will offset losses from the drop in 786 Investment's long position.| Shaheen Insurance vs. Sitara Chemical Industries | Shaheen Insurance vs. Ittehad Chemicals | Shaheen Insurance vs. 786 Investment Limited | Shaheen Insurance vs. JS Investments |
| 786 Investment vs. Century Insurance | 786 Investment vs. Allied Bank | 786 Investment vs. Pakistan Telecommunication | 786 Investment vs. Matco 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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