Correlation Between Century Insurance and Agha Steel
Can any of the company-specific risk be diversified away by investing in both Century Insurance and Agha Steel 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 Century Insurance and Agha Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Insurance and Agha Steel Industries, you can compare the effects of market volatilities on Century Insurance and Agha Steel 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 Century Insurance with a short position of Agha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Insurance and Agha Steel.
Diversification Opportunities for Century Insurance and Agha Steel
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and Agha is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Century Insurance and Agha Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agha Steel Industries and Century 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 Century Insurance are associated (or correlated) with Agha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agha Steel Industries has no effect on the direction of Century Insurance i.e., Century Insurance and Agha Steel go up and down completely randomly.
Pair Corralation between Century Insurance and Agha Steel
Assuming the 90 days trading horizon Century Insurance is expected to generate 1.31 times more return on investment than Agha Steel. However, Century Insurance is 1.31 times more volatile than Agha Steel Industries. It trades about 0.28 of its potential returns per unit of risk. Agha Steel Industries is currently generating about -0.27 per unit of risk. If you would invest 3,920 in Century Insurance on December 4, 2024 and sell it today you would earn a total of 559.00 from holding Century Insurance or generate 14.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Century Insurance vs. Agha Steel Industries
Performance |
Timeline |
Century Insurance |
Agha Steel Industries |
Century Insurance and Agha Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Century Insurance and Agha Steel
The main advantage of trading using opposite Century Insurance and Agha Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Insurance position performs unexpectedly, Agha Steel 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 Agha Steel will offset losses from the drop in Agha Steel's long position.Century Insurance vs. Masood Textile Mills | Century Insurance vs. Fauji Foods | Century Insurance vs. KSB Pumps | Century Insurance vs. Mari Petroleum |
Agha Steel vs. Fauji Foods | Agha Steel vs. Sindh Modaraba Management | Agha Steel vs. Metropolitan Steel Corp | Agha Steel vs. Matco Foods |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |