Correlation Between Shaheen Insurance and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both Shaheen Insurance and Universal 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 Universal 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 Universal Insurance, you can compare the effects of market volatilities on Shaheen Insurance and Universal 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 Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and Universal Insurance.
Diversification Opportunities for Shaheen Insurance and Universal Insurance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaheen and Universal is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and Universal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal 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 Universal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Insurance has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and Universal Insurance go up and down completely randomly.
Pair Corralation between Shaheen Insurance and Universal Insurance
Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 0.6 times more return on investment than Universal Insurance. However, Shaheen Insurance is 1.66 times less risky than Universal Insurance. It trades about 0.06 of its potential returns per unit of risk. Universal Insurance is currently generating about -0.09 per unit of risk. If you would invest 633.00 in Shaheen Insurance on October 26, 2024 and sell it today you would earn a total of 19.00 from holding Shaheen Insurance or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Shaheen Insurance vs. Universal Insurance
Performance |
| Timeline |
| Shaheen Insurance |
| Universal Insurance |
Shaheen Insurance and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaheen Insurance and Universal Insurance
The main advantage of trading using opposite Shaheen Insurance and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaheen Insurance position performs unexpectedly, Universal 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 Universal Insurance will offset losses from the drop in Universal Insurance's long position.| Shaheen Insurance vs. Orient Rental Modaraba | Shaheen Insurance vs. Pakistan Tobacco | Shaheen Insurance vs. Universal Insurance | Shaheen Insurance vs. Askari General Insurance |
| Universal Insurance vs. Honda Atlas Cars | Universal Insurance vs. Shaheen Insurance | Universal Insurance vs. Bank of Punjab | Universal Insurance vs. Allied 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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