Correlation Between Shaheen Insurance and WorldCall Telecom

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

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

Diversification Opportunities for Shaheen Insurance and WorldCall Telecom

-0.28

Correlation Coefficient

Shaheen Insurance  WorldCall Telecom

Very good diversification

The 3 months correlation between Shaheen and WorldCall is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and WorldCall Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WorldCall Telecom 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 WorldCall Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WorldCall Telecom has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and WorldCall Telecom go up and down completely randomly.

Pair Corralation between Shaheen Insurance and WorldCall Telecom

Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 1.22 times more return on investment than WorldCall Telecom. However, Shaheen Insurance is 1.22 times more volatile than WorldCall Telecom. It trades about 0.07 of its potential returns per unit of risk. WorldCall Telecom is currently generating about -0.14 per unit of risk. If you would invest  613.00  in Shaheen Insurance on December 24, 2024 and sell it today you would earn a total of  61.00  from holding Shaheen Insurance or generate 9.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Shaheen Insurance  vs.  WorldCall Telecom

Shaheen Insurance

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shaheen Insurance are ranked lower than 5 (%) 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.

WorldCall Telecom

Risk-Adjusted Performance

Very Weak

Over the last 90 days WorldCall Telecom has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Shaheen Insurance and WorldCall Telecom

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

The idea behind Shaheen Insurance and WorldCall Telecom 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.