Correlation Between Thatta Cement and PICIC Insurance
Can any of the company-specific risk be diversified away by investing in both Thatta Cement and PICIC 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 Thatta Cement and PICIC Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thatta Cement and PICIC Insurance, you can compare the effects of market volatilities on Thatta Cement and PICIC 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 Thatta Cement with a short position of PICIC Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thatta Cement and PICIC Insurance.
Diversification Opportunities for Thatta Cement and PICIC Insurance
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thatta and PICIC is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Thatta Cement and PICIC Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICIC Insurance and Thatta Cement 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 Thatta Cement are associated (or correlated) with PICIC Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICIC Insurance has no effect on the direction of Thatta Cement i.e., Thatta Cement and PICIC Insurance go up and down completely randomly.
Pair Corralation between Thatta Cement and PICIC Insurance
Assuming the 90 days trading horizon Thatta Cement is expected to generate 0.82 times more return on investment than PICIC Insurance. However, Thatta Cement is 1.22 times less risky than PICIC Insurance. It trades about 0.32 of its potential returns per unit of risk. PICIC Insurance is currently generating about 0.0 per unit of risk. If you would invest 7,913 in Thatta Cement on August 28, 2024 and sell it today you would earn a total of 6,587 from holding Thatta Cement or generate 83.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thatta Cement vs. PICIC Insurance
Performance |
| Timeline |
| Thatta Cement |
| PICIC Insurance |
Thatta Cement and PICIC Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thatta Cement and PICIC Insurance
The main advantage of trading using opposite Thatta Cement and PICIC Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thatta Cement position performs unexpectedly, PICIC 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 PICIC Insurance will offset losses from the drop in PICIC Insurance's long position.| Thatta Cement vs. Shaheen Insurance | Thatta Cement vs. Pakistan Hotel Developers | Thatta Cement vs. Jubilee Life Insurance | Thatta Cement vs. Hi Tech Lubricants |
| PICIC Insurance vs. Habib Bank | PICIC Insurance vs. National Bank of | PICIC Insurance vs. United Bank | PICIC 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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