Correlation Between Karachi 100 and Century Paper
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By analyzing existing cross correlation between Karachi 100 and Century Paper Board, you can compare the effects of market volatilities on Karachi 100 and Century Paper 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 Century Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karachi 100 and Century Paper.
Diversification Opportunities for Karachi 100 and Century Paper
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Karachi and Century is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Karachi 100 and Century Paper Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Paper Board 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 Century Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Paper Board has no effect on the direction of Karachi 100 i.e., Karachi 100 and Century Paper go up and down completely randomly.
Pair Corralation between Karachi 100 and Century Paper
Assuming the 90 days trading horizon Karachi 100 is expected to generate 0.53 times more return on investment than Century Paper. However, Karachi 100 is 1.9 times less risky than Century Paper. It trades about 0.24 of its potential returns per unit of risk. Century Paper Board is currently generating about 0.08 per unit of risk. If you would invest 9,019,552 in Karachi 100 on October 27, 2024 and sell it today you would earn a total of 2,468,448 from holding Karachi 100 or generate 27.37% 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. Century Paper Board
Performance |
Timeline |
Karachi 100 and Century Paper Volatility Contrast
Predicted Return Density |
Returns |
Karachi 100
Pair trading matchups for Karachi 100
Century Paper Board
Pair trading matchups for Century Paper
Pair Trading with Karachi 100 and Century Paper
The main advantage of trading using opposite Karachi 100 and Century Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karachi 100 position performs unexpectedly, Century Paper 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 Century Paper will offset losses from the drop in Century Paper's long position.Karachi 100 vs. Ittehad Chemicals | ||
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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