Correlation Between IBL HealthCare and Shaheen Insurance
Can any of the company-specific risk be diversified away by investing in both IBL HealthCare and Shaheen 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 IBL HealthCare and Shaheen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBL HealthCare and Shaheen Insurance, you can compare the effects of market volatilities on IBL HealthCare and Shaheen 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 IBL HealthCare with a short position of Shaheen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBL HealthCare and Shaheen Insurance.
Diversification Opportunities for IBL HealthCare and Shaheen Insurance
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IBL and Shaheen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding IBL HealthCare and Shaheen Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaheen Insurance and IBL HealthCare 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 IBL HealthCare are associated (or correlated) with Shaheen Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaheen Insurance has no effect on the direction of IBL HealthCare i.e., IBL HealthCare and Shaheen Insurance go up and down completely randomly.
Pair Corralation between IBL HealthCare and Shaheen Insurance
Assuming the 90 days trading horizon IBL HealthCare is expected to under-perform the Shaheen Insurance. But the stock apears to be less risky and, when comparing its historical volatility, IBL HealthCare is 1.43 times less risky than Shaheen Insurance. The stock trades about -0.06 of its potential returns per unit of risk. The Shaheen Insurance is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 632.00 in Shaheen Insurance on December 30, 2024 and sell it today you would earn a total of 114.00 from holding Shaheen Insurance or generate 18.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.83% |
Values | Daily Returns |
IBL HealthCare vs. Shaheen Insurance
Performance |
Timeline |
IBL HealthCare |
Shaheen Insurance |
IBL HealthCare and Shaheen Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IBL HealthCare and Shaheen Insurance
The main advantage of trading using opposite IBL HealthCare and Shaheen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBL HealthCare position performs unexpectedly, Shaheen 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 Shaheen Insurance will offset losses from the drop in Shaheen Insurance's long position.IBL HealthCare vs. Nimir Industrial Chemical | IBL HealthCare vs. Askari General Insurance | IBL HealthCare vs. Jubilee Life Insurance | IBL HealthCare vs. Unilever Pakistan Foods |
Shaheen Insurance vs. Matco Foods | Shaheen Insurance vs. Pakistan Telecommunication | Shaheen Insurance vs. Fauji Foods | Shaheen Insurance vs. Invest Capital Investment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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