Correlation Between Karachi 100 and Al Shaheer
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By analyzing existing cross correlation between Karachi 100 and Al Shaheer, you can compare the effects of market volatilities on Karachi 100 and Al Shaheer 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 Karachi 100 with a short position of Al Shaheer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karachi 100 and Al Shaheer.
Diversification Opportunities for Karachi 100 and Al Shaheer
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Karachi and ASC is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Karachi 100 and Al Shaheer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Shaheer and Karachi 100 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 Karachi 100 are associated (or correlated) with Al Shaheer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Shaheer has no effect on the direction of Karachi 100 i.e., Karachi 100 and Al Shaheer go up and down completely randomly.
Pair Corralation between Karachi 100 and Al Shaheer
Assuming the 90 days trading horizon Karachi 100 is expected to generate 0.58 times more return on investment than Al Shaheer. However, Karachi 100 is 1.74 times less risky than Al Shaheer. It trades about 0.11 of its potential returns per unit of risk. Al Shaheer is currently generating about -0.08 per unit of risk. If you would invest 10,889,700 in Karachi 100 on October 11, 2024 and sell it today you would earn a total of 525,100 from holding Karachi 100 or generate 4.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Karachi 100 vs. Al Shaheer
Performance |
Timeline |
Karachi 100 and Al Shaheer Volatility Contrast
Predicted Return Density |
Returns |
Karachi 100
Pair trading matchups for Karachi 100
Al Shaheer
Pair trading matchups for Al Shaheer
Pair Trading with Karachi 100 and Al Shaheer
The main advantage of trading using opposite Karachi 100 and Al Shaheer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karachi 100 position performs unexpectedly, Al Shaheer 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 Al Shaheer will offset losses from the drop in Al Shaheer's long position.Karachi 100 vs. EFU General Insurance | Karachi 100 vs. Jubilee Life Insurance | Karachi 100 vs. Pakistan Aluminium Beverage | Karachi 100 vs. Crescent Star Insurance |
Al Shaheer vs. Soneri Bank | Al Shaheer vs. Crescent Star Insurance | Al Shaheer vs. Allied Bank | Al Shaheer vs. Adamjee Insurance |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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