Correlation Between Shaheen Insurance and Media Times

Can any of the company-specific risk be diversified away by investing in both Shaheen Insurance and Media Times 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 Shaheen Insurance and Media Times into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shaheen Insurance and Media Times, you can compare the effects of market volatilities on Shaheen Insurance and Media Times 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 Shaheen Insurance with a short position of Media Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and Media Times.

Diversification Opportunities for Shaheen Insurance and Media Times

0.41

Correlation Coefficient

Shaheen Insurance  Media Times

Very weak diversification

The 3 months correlation between Shaheen and Media is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and Media Times in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Times and Shaheen Insurance 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 Shaheen Insurance are associated (or correlated) with Media Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Times has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and Media Times go up and down completely randomly.

Pair Corralation between Shaheen Insurance and Media Times

Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 0.61 times more return on investment than Media Times. However, Shaheen Insurance is 1.65 times less risky than Media Times. It trades about 0.09 of its potential returns per unit of risk. Media Times is currently generating about 0.04 per unit of risk. If you would invest  309.00  in Shaheen Insurance on September 28, 2024 and sell it today you would earn a total of  324.00  from holding Shaheen Insurance or generate 104.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.19%
Values	Daily Returns

Shaheen Insurance  vs.  Media Times

Shaheen Insurance

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shaheen Insurance are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shaheen Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Media Times

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Shaheen Insurance and Media Times

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

The idea behind Shaheen Insurance and Media Times 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.