Correlation Between Pakistan Oilfields and Fateh Sports

Can any of the company-specific risk be diversified away by investing in both Pakistan Oilfields and Fateh Sports 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 Pakistan Oilfields and Fateh Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pakistan Oilfields and Fateh Sports Wear, you can compare the effects of market volatilities on Pakistan Oilfields and Fateh Sports 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 Pakistan Oilfields with a short position of Fateh Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakistan Oilfields and Fateh Sports.

Diversification Opportunities for Pakistan Oilfields and Fateh Sports

0.0

Correlation Coefficient

Pakistan Oilfields  Fateh Sports

Pay attention - limited upside

The 3 months correlation between Pakistan and Fateh is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pakistan Oilfields and Fateh Sports Wear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fateh Sports Wear and Pakistan Oilfields 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 Pakistan Oilfields are associated (or correlated) with Fateh Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fateh Sports Wear has no effect on the direction of Pakistan Oilfields i.e., Pakistan Oilfields and Fateh Sports go up and down completely randomly.

Pair Corralation between Pakistan Oilfields and Fateh Sports

If you would invest  0.00  in Fateh Sports Wear on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Fateh Sports Wear or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Pakistan Oilfields  vs.  Fateh Sports Wear

Pakistan Oilfields

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pakistan Oilfields has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Fateh Sports Wear

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fateh Sports Wear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Fateh Sports is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pakistan Oilfields and Fateh Sports

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

The idea behind Pakistan Oilfields and Fateh Sports Wear 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.