Correlation Between Shaheen Insurance and Hi Tech
Can any of the company-specific risk be diversified away by investing in both Shaheen Insurance and Hi Tech 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 Hi Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaheen Insurance and Hi Tech Lubricants, you can compare the effects of market volatilities on Shaheen Insurance and Hi Tech 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 Hi Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and Hi Tech.
Diversification Opportunities for Shaheen Insurance and Hi Tech
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaheen and HTL is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and Hi Tech Lubricants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech Lubricants 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 Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech Lubricants has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and Hi Tech go up and down completely randomly.
Pair Corralation between Shaheen Insurance and Hi Tech
Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 0.77 times more return on investment than Hi Tech. However, Shaheen Insurance is 1.29 times less risky than Hi Tech. It trades about 0.33 of its potential returns per unit of risk. Hi Tech Lubricants is currently generating about 0.13 per unit of risk. If you would invest 475.00 in Shaheen Insurance on August 28, 2024 and sell it today you would earn a total of 85.00 from holding Shaheen Insurance or generate 17.89% 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. Hi Tech Lubricants
Performance |
| Timeline |
| Shaheen Insurance |
| Hi Tech Lubricants |
Shaheen Insurance and Hi Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaheen Insurance and Hi Tech
The main advantage of trading using opposite Shaheen Insurance and Hi Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaheen Insurance position performs unexpectedly, Hi Tech 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 Hi Tech will offset losses from the drop in Hi Tech's long position.| Shaheen Insurance vs. Pakistan Telecommunication | Shaheen Insurance vs. International Steels | Shaheen Insurance vs. 786 Investment Limited | Shaheen Insurance vs. Beco Steel |
| Hi Tech vs. Al Ghazi Tractors | Hi Tech vs. Shell Pakistan | Hi Tech vs. Nestle Pakistan | Hi Tech vs. Hinopak Motors |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |