Correlation Between Sitara Chemical and Atlas Insurance
Can any of the company-specific risk be diversified away by investing in both Sitara Chemical and Atlas 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 Sitara Chemical and Atlas Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitara Chemical Industries and Atlas Insurance, you can compare the effects of market volatilities on Sitara Chemical and Atlas 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 Sitara Chemical with a short position of Atlas Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitara Chemical and Atlas Insurance.
Diversification Opportunities for Sitara Chemical and Atlas Insurance
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sitara and Atlas is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sitara Chemical Industries and Atlas Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Insurance and Sitara Chemical 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 Sitara Chemical Industries are associated (or correlated) with Atlas Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Insurance has no effect on the direction of Sitara Chemical i.e., Sitara Chemical and Atlas Insurance go up and down completely randomly.
Pair Corralation between Sitara Chemical and Atlas Insurance
Assuming the 90 days trading horizon Sitara Chemical is expected to generate 3.39 times less return on investment than Atlas Insurance. In addition to that, Sitara Chemical is 1.25 times more volatile than Atlas Insurance. It trades about 0.11 of its total potential returns per unit of risk. Atlas Insurance is currently generating about 0.46 per unit of volatility. If you would invest 4,747 in Atlas Insurance on September 4, 2024 and sell it today you would earn a total of 953.00 from holding Atlas Insurance or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sitara Chemical Industries vs. Atlas Insurance
Performance |
| Timeline |
| Sitara Chemical Indu |
| Atlas Insurance |
Sitara Chemical and Atlas Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitara Chemical and Atlas Insurance
The main advantage of trading using opposite Sitara Chemical and Atlas Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitara Chemical position performs unexpectedly, Atlas 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 Atlas Insurance will offset losses from the drop in Atlas Insurance's long position.| Sitara Chemical vs. Masood Textile Mills | Sitara Chemical vs. Fauji Foods | Sitara Chemical vs. KSB Pumps | Sitara Chemical vs. Mari Petroleum |
| Atlas Insurance vs. Oil and Gas | Atlas Insurance vs. Pakistan State Oil | Atlas Insurance vs. Pakistan Petroleum | Atlas Insurance vs. Fauji Fertilizer |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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