Correlation Between Soneri Bank and Atlas Insurance
Can any of the company-specific risk be diversified away by investing in both Soneri Bank 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 Soneri Bank and Atlas Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soneri Bank and Atlas Insurance, you can compare the effects of market volatilities on Soneri Bank 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 Soneri Bank with a short position of Atlas Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soneri Bank and Atlas Insurance.
Diversification Opportunities for Soneri Bank and Atlas Insurance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Soneri and Atlas is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Soneri Bank and Atlas Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Insurance and Soneri Bank 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 Soneri Bank 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 Soneri Bank i.e., Soneri Bank and Atlas Insurance go up and down completely randomly.
Pair Corralation between Soneri Bank and Atlas Insurance
Assuming the 90 days trading horizon Soneri Bank is expected to generate 1.44 times more return on investment than Atlas Insurance. However, Soneri Bank is 1.44 times more volatile than Atlas Insurance. It trades about 0.29 of its potential returns per unit of risk. Atlas Insurance is currently generating about 0.4 per unit of risk. If you would invest 1,452 in Soneri Bank on September 13, 2024 and sell it today you would earn a total of 289.00 from holding Soneri Bank or generate 19.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Soneri Bank vs. Atlas Insurance
Performance |
| Timeline |
| Soneri Bank |
| Atlas Insurance |
Soneri Bank and Atlas Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soneri Bank and Atlas Insurance
The main advantage of trading using opposite Soneri Bank and Atlas Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soneri Bank 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.| Soneri Bank vs. Crescent Steel Allied | Soneri Bank vs. Dost Steels | Soneri Bank vs. Pakistan Aluminium Beverage | Soneri Bank vs. Matco Foods |
| Atlas Insurance vs. Masood Textile Mills | Atlas Insurance vs. Fauji Foods | Atlas Insurance vs. KSB Pumps | Atlas Insurance vs. Mari Petroleum |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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