Correlation Between Security Investment and Khyber Tobacco
Can any of the company-specific risk be diversified away by investing in both Security Investment and Khyber Tobacco 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 Khyber Tobacco 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 Khyber Tobacco, you can compare the effects of market volatilities on Security Investment and Khyber Tobacco 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 Khyber Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Investment and Khyber Tobacco.
Diversification Opportunities for Security Investment and Khyber Tobacco
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Security and Khyber is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Security Investment Bank and Khyber Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khyber Tobacco 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 Khyber Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khyber Tobacco has no effect on the direction of Security Investment i.e., Security Investment and Khyber Tobacco go up and down completely randomly.
Pair Corralation between Security Investment and Khyber Tobacco
Assuming the 90 days trading horizon Security Investment Bank is expected to generate 2.73 times more return on investment than Khyber Tobacco. However, Security Investment is 2.73 times more volatile than Khyber Tobacco. It trades about 0.13 of its potential returns per unit of risk. Khyber Tobacco is currently generating about -0.09 per unit of risk. If you would invest 466.00 in Security Investment Bank on September 4, 2024 and sell it today you would earn a total of 40.00 from holding Security Investment Bank or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Security Investment Bank vs. Khyber Tobacco
Performance |
| Timeline |
| Security Investment Bank |
| Khyber Tobacco |
Security Investment and Khyber Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Investment and Khyber Tobacco
The main advantage of trading using opposite Security Investment and Khyber Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Investment position performs unexpectedly, Khyber Tobacco 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 Khyber Tobacco will offset losses from the drop in Khyber Tobacco's long position.| Security Investment vs. Masood Textile Mills | Security Investment vs. Fauji Foods | Security Investment vs. KSB Pumps | Security Investment vs. Mari Petroleum |
| Khyber Tobacco vs. Sindh Modaraba Management | Khyber Tobacco vs. Engro Polymer Chemicals | Khyber Tobacco vs. Air Link Communication | Khyber Tobacco vs. Security Investment 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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