Correlation Between Sindh Modaraba and Al Ghazi
Can any of the company-specific risk be diversified away by investing in both Sindh Modaraba and Al Ghazi 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 Sindh Modaraba and Al Ghazi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sindh Modaraba Management and Al Ghazi Tractors, you can compare the effects of market volatilities on Sindh Modaraba and Al Ghazi 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 Sindh Modaraba with a short position of Al Ghazi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sindh Modaraba and Al Ghazi.
Diversification Opportunities for Sindh Modaraba and Al Ghazi
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sindh and AGTL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sindh Modaraba Management and Al Ghazi Tractors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Ghazi Tractors and Sindh Modaraba 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 Sindh Modaraba Management are associated (or correlated) with Al Ghazi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Ghazi Tractors has no effect on the direction of Sindh Modaraba i.e., Sindh Modaraba and Al Ghazi go up and down completely randomly.
Pair Corralation between Sindh Modaraba and Al Ghazi
Assuming the 90 days trading horizon Sindh Modaraba Management is expected to generate 1.42 times more return on investment than Al Ghazi. However, Sindh Modaraba is 1.42 times more volatile than Al Ghazi Tractors. It trades about 0.07 of its potential returns per unit of risk. Al Ghazi Tractors is currently generating about 0.01 per unit of risk. If you would invest 766.00 in Sindh Modaraba Management on September 4, 2024 and sell it today you would earn a total of 258.00 from holding Sindh Modaraba Management or generate 33.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.88% |
| Values | Daily Returns |
Sindh Modaraba Management vs. Al Ghazi Tractors
Performance |
| Timeline |
| Sindh Modaraba Management |
| Al Ghazi Tractors |
Sindh Modaraba and Al Ghazi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sindh Modaraba and Al Ghazi
The main advantage of trading using opposite Sindh Modaraba and Al Ghazi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sindh Modaraba position performs unexpectedly, Al Ghazi 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 Al Ghazi will offset losses from the drop in Al Ghazi's long position.| Sindh Modaraba vs. Masood Textile Mills | Sindh Modaraba vs. Fauji Foods | Sindh Modaraba vs. KSB Pumps | Sindh Modaraba vs. Mari Petroleum |
| Al Ghazi vs. MCB Investment Manag | Al Ghazi vs. Mughal Iron Steel | Al Ghazi vs. Pakistan Telecommunication | Al Ghazi vs. Pak Gulf Leasing |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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