Correlation Between Unilever Pakistan and Gul Ahmed
Can any of the company-specific risk be diversified away by investing in both Unilever Pakistan and Gul Ahmed 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 Gul Ahmed 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 Gul Ahmed Textile, you can compare the effects of market volatilities on Unilever Pakistan and Gul Ahmed 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 Gul Ahmed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Pakistan and Gul Ahmed.
Diversification Opportunities for Unilever Pakistan and Gul Ahmed
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Unilever and Gul is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Pakistan Foods and Gul Ahmed Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gul Ahmed Textile 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 Gul Ahmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gul Ahmed Textile has no effect on the direction of Unilever Pakistan i.e., Unilever Pakistan and Gul Ahmed go up and down completely randomly.
Pair Corralation between Unilever Pakistan and Gul Ahmed
Assuming the 90 days trading horizon Unilever Pakistan Foods is expected to generate 0.37 times more return on investment than Gul Ahmed. However, Unilever Pakistan Foods is 2.74 times less risky than Gul Ahmed. It trades about 0.21 of its potential returns per unit of risk. Gul Ahmed Textile is currently generating about 0.02 per unit of risk. If you would invest 2,100,001 in Unilever Pakistan Foods on October 25, 2024 and sell it today you would earn a total of 89,999 from holding Unilever Pakistan Foods or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever Pakistan Foods vs. Gul Ahmed Textile
Performance |
| Timeline |
| Unilever Pakistan Foods |
| Gul Ahmed Textile |
Unilever Pakistan and Gul Ahmed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Pakistan and Gul Ahmed
The main advantage of trading using opposite Unilever Pakistan and Gul Ahmed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Pakistan position performs unexpectedly, Gul Ahmed 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 Gul Ahmed will offset losses from the drop in Gul Ahmed's long position.| Unilever Pakistan vs. TPL Insurance | Unilever Pakistan vs. Allied Bank | Unilever Pakistan vs. Soneri Bank | Unilever Pakistan vs. Century Insurance |
| Gul Ahmed vs. Atlas Insurance | Gul Ahmed vs. Habib Insurance | Gul Ahmed vs. Unilever Pakistan Foods | Gul Ahmed vs. Pakistan Reinsurance |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |