Correlation Between Shaheen Insurance and Murree Brewery
Can any of the company-specific risk be diversified away by investing in both Shaheen Insurance and Murree Brewery 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 Murree Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaheen Insurance and Murree Brewery, you can compare the effects of market volatilities on Shaheen Insurance and Murree Brewery 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 Murree Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and Murree Brewery.
Diversification Opportunities for Shaheen Insurance and Murree Brewery
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shaheen and Murree is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and Murree Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murree Brewery 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 Murree Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murree Brewery has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and Murree Brewery go up and down completely randomly.
Pair Corralation between Shaheen Insurance and Murree Brewery
Assuming the 90 days trading horizon Shaheen Insurance is expected to under-perform the Murree Brewery. In addition to that, Shaheen Insurance is 2.87 times more volatile than Murree Brewery. It trades about -0.1 of its total potential returns per unit of risk. Murree Brewery is currently generating about 0.13 per unit of volatility. If you would invest 78,255 in Murree Brewery on November 5, 2024 and sell it today you would earn a total of 2,260 from holding Murree Brewery or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
Shaheen Insurance vs. Murree Brewery
Performance |
| Timeline |
| Shaheen Insurance |
| Murree Brewery |
Shaheen Insurance and Murree Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaheen Insurance and Murree Brewery
The main advantage of trading using opposite Shaheen Insurance and Murree Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaheen Insurance position performs unexpectedly, Murree Brewery 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 Murree Brewery will offset losses from the drop in Murree Brewery's long position.| Shaheen Insurance vs. Masood Textile Mills | Shaheen Insurance vs. Fauji Foods | Shaheen Insurance vs. KSB Pumps | Shaheen Insurance vs. Mari Petroleum |
| Murree Brewery vs. Avanceon | Murree Brewery vs. EFU General Insurance | Murree Brewery vs. Universal Insurance | Murree Brewery vs. Agha Steel Industries |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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