Correlation Between SME Leasing and KOT Addu
Can any of the company-specific risk be diversified away by investing in both SME Leasing and KOT Addu 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 SME Leasing and KOT Addu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SME Leasing and KOT Addu Power, you can compare the effects of market volatilities on SME Leasing and KOT Addu 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 SME Leasing with a short position of KOT Addu. Check out your portfolio center. Please also check ongoing floating volatility patterns of SME Leasing and KOT Addu.
Diversification Opportunities for SME Leasing and KOT Addu
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SME and KOT is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SME Leasing and KOT Addu Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOT Addu Power and SME Leasing 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 SME Leasing are associated (or correlated) with KOT Addu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOT Addu Power has no effect on the direction of SME Leasing i.e., SME Leasing and KOT Addu go up and down completely randomly.
Pair Corralation between SME Leasing and KOT Addu
If you would invest 2,948 in KOT Addu Power on September 2, 2024 and sell it today you would earn a total of 686.00 from holding KOT Addu Power or generate 23.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
SME Leasing vs. KOT Addu Power
Performance |
| Timeline |
| SME Leasing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KOT Addu Power |
SME Leasing and KOT Addu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SME Leasing and KOT Addu
The main advantage of trading using opposite SME Leasing and KOT Addu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SME Leasing position performs unexpectedly, KOT Addu 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 KOT Addu will offset losses from the drop in KOT Addu's long position.| SME Leasing vs. Masood Textile Mills | SME Leasing vs. Fauji Foods | SME Leasing vs. KSB Pumps | SME Leasing vs. Mari Petroleum |
| KOT Addu vs. Habib Insurance | KOT Addu vs. Adamjee Insurance | KOT Addu vs. Shifa International Hospitals | KOT Addu vs. Unilever Pakistan Foods |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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