Correlation Between Shaheen Insurance and Al Ghazi
Can any of the company-specific risk be diversified away by investing in both Shaheen Insurance and Al Ghazi 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 Al Ghazi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaheen Insurance and Al Ghazi Tractors, you can compare the effects of market volatilities on Shaheen Insurance and Al Ghazi 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 Al Ghazi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and Al Ghazi.
Diversification Opportunities for Shaheen Insurance and Al Ghazi
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shaheen and AGTL is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and Al Ghazi Tractors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Ghazi Tractors 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 Al Ghazi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Ghazi Tractors has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and Al Ghazi go up and down completely randomly.
Pair Corralation between Shaheen Insurance and Al Ghazi
Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 1.74 times more return on investment than Al Ghazi. However, Shaheen Insurance is 1.74 times more volatile than Al Ghazi Tractors. It trades about 0.08 of its potential returns per unit of risk. Al Ghazi Tractors is currently generating about 0.09 per unit of risk. If you would invest 272.00 in Shaheen Insurance on September 12, 2024 and sell it today you would earn a total of 313.00 from holding Shaheen Insurance or generate 115.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.69% |
| Values | Daily Returns |
Shaheen Insurance vs. Al Ghazi Tractors
Performance |
| Timeline |
| Shaheen Insurance |
| Al Ghazi Tractors |
Shaheen Insurance and Al Ghazi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaheen Insurance and Al Ghazi
The main advantage of trading using opposite Shaheen Insurance and Al Ghazi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaheen Insurance position performs unexpectedly, Al Ghazi 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 Al Ghazi will offset losses from the drop in Al Ghazi's long position.| Shaheen Insurance vs. Masood Textile Mills | Shaheen Insurance vs. Fauji Foods | Shaheen Insurance vs. KSB Pumps | Shaheen Insurance vs. Mari Petroleum |
| Al Ghazi vs. Matco Foods | Al Ghazi vs. Nimir Industrial Chemical | Al Ghazi vs. Habib Insurance | Al Ghazi vs. Century Insurance |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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