Correlation Between MCB Investment and Habib Insurance
Can any of the company-specific risk be diversified away by investing in both MCB Investment and Habib Insurance 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 MCB Investment and Habib Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCB Investment Manag and Habib Insurance, you can compare the effects of market volatilities on MCB Investment and Habib Insurance 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 MCB Investment with a short position of Habib Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCB Investment and Habib Insurance.
Diversification Opportunities for MCB Investment and Habib Insurance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MCB and Habib is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MCB Investment Manag and Habib Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Insurance and MCB Investment 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 MCB Investment Manag are associated (or correlated) with Habib Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Insurance has no effect on the direction of MCB Investment i.e., MCB Investment and Habib Insurance go up and down completely randomly.
Pair Corralation between MCB Investment and Habib Insurance
Assuming the 90 days trading horizon MCB Investment Manag is expected to generate 0.83 times more return on investment than Habib Insurance. However, MCB Investment Manag is 1.2 times less risky than Habib Insurance. It trades about 0.32 of its potential returns per unit of risk. Habib Insurance is currently generating about 0.15 per unit of risk. If you would invest 3,709 in MCB Investment Manag on September 11, 2024 and sell it today you would earn a total of 3,128 from holding MCB Investment Manag or generate 84.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 88.71% |
Values | Daily Returns |
MCB Investment Manag vs. Habib Insurance
Performance |
Timeline |
MCB Investment Manag |
Habib Insurance |
MCB Investment and Habib Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MCB Investment and Habib Insurance
The main advantage of trading using opposite MCB Investment and Habib Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCB Investment position performs unexpectedly, Habib Insurance 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 Habib Insurance will offset losses from the drop in Habib Insurance's long position.MCB Investment vs. Security Investment Bank | MCB Investment vs. Data Agro | MCB Investment vs. Dost Steels | MCB Investment vs. JS Investments |
Habib Insurance vs. Masood Textile Mills | Habib Insurance vs. Fauji Foods | Habib Insurance vs. KSB Pumps | Habib Insurance vs. Mari Petroleum |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |