Correlation Between Unilever Pakistan and Big Bird
Can any of the company-specific risk be diversified away by investing in both Unilever Pakistan and Big Bird 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 Unilever Pakistan and Big Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Pakistan Foods and Big Bird Foods, you can compare the effects of market volatilities on Unilever Pakistan and Big Bird 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 Unilever Pakistan with a short position of Big Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Pakistan and Big Bird.
Diversification Opportunities for Unilever Pakistan and Big Bird
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Unilever and Big is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Pakistan Foods and Big Bird Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Bird Foods and Unilever Pakistan 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 Unilever Pakistan Foods are associated (or correlated) with Big Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Bird Foods has no effect on the direction of Unilever Pakistan i.e., Unilever Pakistan and Big Bird go up and down completely randomly.
Pair Corralation between Unilever Pakistan and Big Bird
Assuming the 90 days trading horizon Unilever Pakistan is expected to generate 1.25 times less return on investment than Big Bird. But when comparing it to its historical volatility, Unilever Pakistan Foods is 4.26 times less risky than Big Bird. It trades about 0.21 of its potential returns per unit of risk. Big Bird Foods is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,910 in Big Bird Foods on October 25, 2024 and sell it today you would earn a total of 180.00 from holding Big Bird Foods or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever Pakistan Foods vs. Big Bird Foods
Performance |
| Timeline |
| Unilever Pakistan Foods |
| Big Bird Foods |
Unilever Pakistan and Big Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Pakistan and Big Bird
The main advantage of trading using opposite Unilever Pakistan and Big Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Pakistan position performs unexpectedly, Big Bird 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 Big Bird will offset losses from the drop in Big Bird's long position.| Unilever Pakistan vs. TPL Insurance | Unilever Pakistan vs. Allied Bank | Unilever Pakistan vs. Soneri Bank | Unilever Pakistan vs. Century Insurance |
| Big Bird vs. Habib Insurance | Big Bird vs. Invest Capital Investment | Big Bird vs. IGI Life Insurance | Big Bird vs. Oil and Gas |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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