Correlation Between Shifa International and Masood Textile
Can any of the company-specific risk be diversified away by investing in both Shifa International and Masood Textile 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 Shifa International and Masood Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shifa International Hospitals and Masood Textile Mills, you can compare the effects of market volatilities on Shifa International and Masood Textile 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 Shifa International with a short position of Masood Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shifa International and Masood Textile.
Diversification Opportunities for Shifa International and Masood Textile
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shifa and Masood is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shifa International Hospitals and Masood Textile Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masood Textile Mills and Shifa International 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 Shifa International Hospitals are associated (or correlated) with Masood Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masood Textile Mills has no effect on the direction of Shifa International i.e., Shifa International and Masood Textile go up and down completely randomly.
Pair Corralation between Shifa International and Masood Textile
Assuming the 90 days trading horizon Shifa International Hospitals is expected to generate 0.62 times more return on investment than Masood Textile. However, Shifa International Hospitals is 1.62 times less risky than Masood Textile. It trades about 0.15 of its potential returns per unit of risk. Masood Textile Mills is currently generating about 0.05 per unit of risk. If you would invest 39,018 in Shifa International Hospitals on December 30, 2024 and sell it today you would earn a total of 8,986 from holding Shifa International Hospitals or generate 23.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 77.78% |
Values | Daily Returns |
Shifa International Hospitals vs. Masood Textile Mills
Performance |
Timeline |
Shifa International |
Masood Textile Mills |
Shifa International and Masood Textile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shifa International and Masood Textile
The main advantage of trading using opposite Shifa International and Masood Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shifa International position performs unexpectedly, Masood Textile 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 Masood Textile will offset losses from the drop in Masood Textile's long position.Shifa International vs. Murree Brewery | Shifa International vs. AKD Hospitality | Shifa International vs. Bawany Air Products | Shifa International vs. Arpak International Investment |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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