Correlation Between Shaheen Insurance and TPL Insurance
Can any of the company-specific risk be diversified away by investing in both Shaheen Insurance and TPL Insurance 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 TPL Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaheen Insurance and TPL Insurance, you can compare the effects of market volatilities on Shaheen Insurance and TPL Insurance 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 TPL Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and TPL Insurance.
Diversification Opportunities for Shaheen Insurance and TPL Insurance
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shaheen and TPL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and TPL Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPL Insurance 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 TPL Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPL Insurance has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and TPL Insurance go up and down completely randomly.
Pair Corralation between Shaheen Insurance and TPL Insurance
Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 1.47 times more return on investment than TPL Insurance. However, Shaheen Insurance is 1.47 times more volatile than TPL Insurance. It trades about 0.08 of its potential returns per unit of risk. TPL Insurance is currently generating about -0.03 per unit of risk. If you would invest 258.00 in Shaheen Insurance on November 19, 2024 and sell it today you would earn a total of 439.00 from holding Shaheen Insurance or generate 170.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.61% |
| Values | Daily Returns |
Shaheen Insurance vs. TPL Insurance
Performance |
| Timeline |
| Shaheen Insurance |
| TPL Insurance |
Shaheen Insurance and TPL Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaheen Insurance and TPL Insurance
The main advantage of trading using opposite Shaheen Insurance and TPL Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaheen Insurance position performs unexpectedly, TPL Insurance 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 TPL Insurance will offset losses from the drop in TPL Insurance's long position.| Shaheen Insurance vs. Grays Leasing | Shaheen Insurance vs. Askari General Insurance | Shaheen Insurance vs. Pakistan Telecommunication | Shaheen Insurance vs. Orient Rental Modaraba |
| TPL Insurance vs. Synthetic Products Enterprises | TPL Insurance vs. Wah Nobel Chemicals | TPL Insurance vs. Air Link Communication | TPL Insurance vs. JS Bank |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
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| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |