Correlation Between INTERNATIONAL ENERGY and JAIZ BANK

Can any of the company-specific risk be diversified away by investing in both INTERNATIONAL ENERGY and JAIZ 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 INTERNATIONAL ENERGY and JAIZ BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INTERNATIONAL ENERGY INSURANCE and JAIZ BANK PLC, you can compare the effects of market volatilities on INTERNATIONAL ENERGY and JAIZ 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 INTERNATIONAL ENERGY with a short position of JAIZ BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNATIONAL ENERGY and JAIZ BANK.

Diversification Opportunities for INTERNATIONAL ENERGY and JAIZ BANK

0.18

Correlation Coefficient

INTERNATIONAL ENERGY  JAIZ BANK

Average diversification

The 3 months correlation between INTERNATIONAL and JAIZ is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding INTERNATIONAL ENERGY INSURANCE and JAIZ BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAIZ BANK PLC and INTERNATIONAL ENERGY 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 INTERNATIONAL ENERGY INSURANCE are associated (or correlated) with JAIZ BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAIZ BANK PLC has no effect on the direction of INTERNATIONAL ENERGY i.e., INTERNATIONAL ENERGY and JAIZ BANK go up and down completely randomly.

Pair Corralation between INTERNATIONAL ENERGY and JAIZ BANK

Assuming the 90 days trading horizon INTERNATIONAL ENERGY INSURANCE is expected to under-perform the JAIZ BANK. But the stock apears to be less risky and, when comparing its historical volatility, INTERNATIONAL ENERGY INSURANCE is 1.19 times less risky than JAIZ BANK. The stock trades about -0.03 of its potential returns per unit of risk. The JAIZ BANK PLC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  226.00  in JAIZ BANK PLC on September 13, 2024 and sell it today you would earn a total of  14.00  from holding JAIZ BANK PLC or generate 6.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

INTERNATIONAL ENERGY INSURANCE  vs.  JAIZ BANK PLC

INTERNATIONAL ENERGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTERNATIONAL ENERGY INSURANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INTERNATIONAL ENERGY is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

JAIZ BANK PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JAIZ BANK PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, JAIZ BANK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with INTERNATIONAL ENERGY and JAIZ BANK

The main advantage of trading using opposite INTERNATIONAL ENERGY and JAIZ BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERNATIONAL ENERGY position performs unexpectedly, JAIZ 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 JAIZ BANK will offset losses from the drop in JAIZ BANK's long position.

The idea behind INTERNATIONAL ENERGY INSURANCE and JAIZ BANK PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.