Correlation Between Security Investment and Askari Bank
Can any of the company-specific risk be diversified away by investing in both Security Investment and Askari Bank 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 Security Investment and Askari Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Security Investment Bank and Askari Bank, you can compare the effects of market volatilities on Security Investment and Askari Bank 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 Security Investment with a short position of Askari Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Investment and Askari Bank.
Diversification Opportunities for Security Investment and Askari Bank
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Security and Askari is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Security Investment Bank and Askari Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Askari Bank and Security Investment 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 Security Investment Bank are associated (or correlated) with Askari Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Askari Bank has no effect on the direction of Security Investment i.e., Security Investment and Askari Bank go up and down completely randomly.
Pair Corralation between Security Investment and Askari Bank
Assuming the 90 days trading horizon Security Investment is expected to generate 2.46 times less return on investment than Askari Bank. In addition to that, Security Investment is 1.43 times more volatile than Askari Bank. It trades about 0.07 of its total potential returns per unit of risk. Askari Bank is currently generating about 0.26 per unit of volatility. If you would invest 3,010 in Askari Bank on August 30, 2024 and sell it today you would earn a total of 501.00 from holding Askari Bank or generate 16.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Security Investment Bank vs. Askari Bank
Performance |
| Timeline |
| Security Investment Bank |
| Askari Bank |
Security Investment and Askari Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Investment and Askari Bank
The main advantage of trading using opposite Security Investment and Askari Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Investment position performs unexpectedly, Askari Bank 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 Askari Bank will offset losses from the drop in Askari Bank's long position.| Security Investment vs. Masood Textile Mills | Security Investment vs. Fauji Foods | Security Investment vs. KSB Pumps | Security Investment vs. Mari Petroleum |
| Askari Bank vs. Avanceon | Askari Bank vs. Sindh Modaraba Management | Askari Bank vs. 786 Investment Limited | Askari Bank vs. MCB Investment Manag |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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