Correlation Between Quice Food and Pakistan National

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

By analyzing existing cross correlation between Quice Food Industries and Pakistan National Shipping, you can compare the effects of market volatilities on Quice Food and Pakistan National 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 Quice Food with a short position of Pakistan National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quice Food and Pakistan National.

Diversification Opportunities for Quice Food and Pakistan National

0.46

Correlation Coefficient

Quice Food  Pakistan National

Very weak diversification

The 3 months correlation between Quice and Pakistan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Quice Food Industries and Pakistan National Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan National and Quice Food 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 Quice Food Industries are associated (or correlated) with Pakistan National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan National has no effect on the direction of Quice Food i.e., Quice Food and Pakistan National go up and down completely randomly.

Pair Corralation between Quice Food and Pakistan National

Assuming the 90 days trading horizon Quice Food Industries is expected to generate 2.31 times more return on investment than Pakistan National. However, Quice Food is 2.31 times more volatile than Pakistan National Shipping. It trades about 0.04 of its potential returns per unit of risk. Pakistan National Shipping is currently generating about -0.32 per unit of risk. If you would invest  640.00  in Quice Food Industries on October 22, 2024 and sell it today you would earn a total of  11.00  from holding Quice Food Industries or generate 1.72% return on investment over 90 days.

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

Quice Food Industries  vs.  Pakistan National Shipping

Quice Food Industries

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Quice Food Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Quice Food disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pakistan National

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pakistan National Shipping are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Pakistan National sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quice Food and Pakistan National

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

The idea behind Quice Food Industries and Pakistan National Shipping 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.