Correlation Between Shaheen Insurance and Arif Habib
Can any of the company-specific risk be diversified away by investing in both Shaheen Insurance and Arif Habib 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 Arif Habib into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaheen Insurance and Arif Habib, you can compare the effects of market volatilities on Shaheen Insurance and Arif Habib 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 Arif Habib. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and Arif Habib.
Diversification Opportunities for Shaheen Insurance and Arif Habib
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaheen and Arif is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and Arif Habib in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arif Habib 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 Arif Habib. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arif Habib has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and Arif Habib go up and down completely randomly.
Pair Corralation between Shaheen Insurance and Arif Habib
Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 0.82 times more return on investment than Arif Habib. However, Shaheen Insurance is 1.23 times less risky than Arif Habib. It trades about 0.29 of its potential returns per unit of risk. Arif Habib is currently generating about 0.18 per unit of risk. If you would invest 500.00 in Shaheen Insurance on September 2, 2024 and sell it today you would earn a total of 99.00 from holding Shaheen Insurance or generate 19.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaheen Insurance vs. Arif Habib
Performance |
| Timeline |
| Shaheen Insurance |
| Arif Habib |
Shaheen Insurance and Arif Habib Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaheen Insurance and Arif Habib
The main advantage of trading using opposite Shaheen Insurance and Arif Habib positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaheen Insurance position performs unexpectedly, Arif Habib 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 Arif Habib will offset losses from the drop in Arif Habib's long position.| Shaheen Insurance vs. Habib Bank | Shaheen Insurance vs. National Bank of | Shaheen Insurance vs. United Bank | Shaheen Insurance vs. MCB Bank |
| Arif Habib vs. Atlas Insurance | Arif Habib vs. Adamjee Insurance | Arif Habib vs. Engro Polymer Chemicals | Arif Habib vs. Wah Nobel Chemicals |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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