Correlation Between Loads and Habib Insurance

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

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

Diversification Opportunities for Loads and Habib Insurance

0.77

Correlation Coefficient

Loads  Habib Insurance

Poor diversification

The 3 months correlation between Loads and Habib is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Loads and Habib Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Insurance and Loads 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 Loads 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 Loads i.e., Loads and Habib Insurance go up and down completely randomly.

Pair Corralation between Loads and Habib Insurance

Assuming the 90 days trading horizon Loads is expected to generate 1.1 times less return on investment than Habib Insurance. But when comparing it to its historical volatility, Loads is 1.25 times less risky than Habib Insurance. It trades about 0.08 of its potential returns per unit of risk. Habib Insurance is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  602.00  in Habib Insurance on September 14, 2024 and sell it today you would earn a total of  264.00  from holding Habib Insurance or generate 43.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	77.18%
Values	Daily Returns

Loads  vs.  Habib Insurance

Loads

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Loads are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Loads disclosed solid returns over the last few months and may actually be approaching a breakup point.

Habib Insurance

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Habib Insurance are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Habib Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Loads and Habib Insurance

The main advantage of trading using opposite Loads and Habib Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loads 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.

The idea behind Loads and Habib Insurance 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.