Correlation Between Shaheen Insurance and Aisha Steel
Can any of the company-specific risk be diversified away by investing in both Shaheen Insurance and Aisha Steel 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 Aisha Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaheen Insurance and Aisha Steel Mills, you can compare the effects of market volatilities on Shaheen Insurance and Aisha Steel 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 Aisha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and Aisha Steel.
Diversification Opportunities for Shaheen Insurance and Aisha Steel
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shaheen and Aisha is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and Aisha Steel Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aisha Steel Mills 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 Aisha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aisha Steel Mills has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and Aisha Steel go up and down completely randomly.
Pair Corralation between Shaheen Insurance and Aisha Steel
Assuming the 90 days trading horizon Shaheen Insurance is expected to under-perform the Aisha Steel. In addition to that, Shaheen Insurance is 1.36 times more volatile than Aisha Steel Mills. It trades about -0.1 of its total potential returns per unit of risk. Aisha Steel Mills is currently generating about -0.08 per unit of volatility. If you would invest 1,174 in Aisha Steel Mills on November 5, 2024 and sell it today you would lose (49.00) from holding Aisha Steel Mills or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
Shaheen Insurance vs. Aisha Steel Mills
Performance |
| Timeline |
| Shaheen Insurance |
| Aisha Steel Mills |
Shaheen Insurance and Aisha Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaheen Insurance and Aisha Steel
The main advantage of trading using opposite Shaheen Insurance and Aisha Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaheen Insurance position performs unexpectedly, Aisha Steel 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 Aisha Steel will offset losses from the drop in Aisha Steel's long position.| Shaheen Insurance vs. Masood Textile Mills | Shaheen Insurance vs. Fauji Foods | Shaheen Insurance vs. KSB Pumps | Shaheen Insurance vs. Mari Petroleum |
| Aisha Steel vs. Crescent Star Insurance | Aisha Steel vs. Sitara Chemical Industries | Aisha Steel vs. Century Insurance | Aisha Steel vs. Jubilee Life 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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