Correlation Between TPL Insurance and Askari Bank
Can any of the company-specific risk be diversified away by investing in both TPL Insurance and Askari Bank 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 TPL Insurance and Askari Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPL Insurance and Askari Bank, you can compare the effects of market volatilities on TPL Insurance and Askari Bank 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 TPL Insurance with a short position of Askari Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPL Insurance and Askari Bank.
Diversification Opportunities for TPL Insurance and Askari Bank
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TPL and Askari is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding TPL Insurance and Askari Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Askari Bank and TPL Insurance 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 TPL Insurance are associated (or correlated) with Askari Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Askari Bank has no effect on the direction of TPL Insurance i.e., TPL Insurance and Askari Bank go up and down completely randomly.
Pair Corralation between TPL Insurance and Askari Bank
Assuming the 90 days trading horizon TPL Insurance is expected to generate 44.22 times less return on investment than Askari Bank. In addition to that, TPL Insurance is 1.08 times more volatile than Askari Bank. It trades about 0.0 of its total potential returns per unit of risk. Askari Bank is currently generating about 0.15 per unit of volatility. If you would invest 2,483 in Askari Bank on November 28, 2024 and sell it today you would earn a total of 1,589 from holding Askari Bank or generate 64.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.77% |
| Values | Daily Returns |
TPL Insurance vs. Askari Bank
Performance |
| Timeline |
| TPL Insurance |
| Askari Bank |
TPL Insurance and Askari Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPL Insurance and Askari Bank
The main advantage of trading using opposite TPL Insurance and Askari Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPL Insurance position performs unexpectedly, Askari Bank 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 Askari Bank will offset losses from the drop in Askari Bank's long position.| TPL Insurance vs. Sindh Modaraba Management | TPL Insurance vs. ITTEFAQ Iron Industries | TPL Insurance vs. Jubilee Life Insurance | TPL Insurance vs. Crescent Star Insurance |
| Askari Bank vs. Oil and Gas | Askari Bank vs. 786 Investment Limited | Askari Bank vs. Big Bird Foods | Askari Bank vs. Sitara Chemical Industries |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |