Correlation Between Sindh Modaraba and Century Insurance
Can any of the company-specific risk be diversified away by investing in both Sindh Modaraba and Century 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 Sindh Modaraba and Century Insurance 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 Century Insurance, you can compare the effects of market volatilities on Sindh Modaraba and Century 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 Sindh Modaraba with a short position of Century Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sindh Modaraba and Century Insurance.
Diversification Opportunities for Sindh Modaraba and Century Insurance
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sindh and Century is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sindh Modaraba Management and Century Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Insurance 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 Century Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Insurance has no effect on the direction of Sindh Modaraba i.e., Sindh Modaraba and Century Insurance go up and down completely randomly.
Pair Corralation between Sindh Modaraba and Century Insurance
Assuming the 90 days trading horizon Sindh Modaraba is expected to generate 1.42 times less return on investment than Century Insurance. In addition to that, Sindh Modaraba is 1.13 times more volatile than Century Insurance. It trades about 0.07 of its total potential returns per unit of risk. Century Insurance is currently generating about 0.11 per unit of volatility. If you would invest 1,219 in Century Insurance on August 25, 2024 and sell it today you would earn a total of 2,381 from holding Century Insurance or generate 195.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.06% |
| Values | Daily Returns |
Sindh Modaraba Management vs. Century Insurance
Performance |
| Timeline |
| Sindh Modaraba Management |
| Century Insurance |
Sindh Modaraba and Century Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sindh Modaraba and Century Insurance
The main advantage of trading using opposite Sindh Modaraba and Century Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sindh Modaraba position performs unexpectedly, Century 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 Century Insurance will offset losses from the drop in Century Insurance's long position.| Sindh Modaraba vs. Century Insurance | Sindh Modaraba vs. Askari Bank | Sindh Modaraba vs. JS Global Banking | Sindh Modaraba vs. Habib Insurance |
| Century Insurance vs. Habib Bank | Century Insurance vs. National Bank of | Century Insurance vs. United Bank | Century Insurance vs. MCB 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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