Correlation Between Meezan Bank and Nimir Industrial
Can any of the company-specific risk be diversified away by investing in both Meezan Bank and Nimir Industrial 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 Meezan Bank and Nimir Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meezan Bank and Nimir Industrial Chemical, you can compare the effects of market volatilities on Meezan Bank and Nimir Industrial 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 Meezan Bank with a short position of Nimir Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meezan Bank and Nimir Industrial.
Diversification Opportunities for Meezan Bank and Nimir Industrial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meezan and Nimir is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Meezan Bank and Nimir Industrial Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nimir Industrial Chemical and Meezan Bank 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 Meezan Bank are associated (or correlated) with Nimir Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nimir Industrial Chemical has no effect on the direction of Meezan Bank i.e., Meezan Bank and Nimir Industrial go up and down completely randomly.
Pair Corralation between Meezan Bank and Nimir Industrial
Assuming the 90 days trading horizon Meezan Bank is expected to generate 0.99 times more return on investment than Nimir Industrial. However, Meezan Bank is 1.01 times less risky than Nimir Industrial. It trades about 0.21 of its potential returns per unit of risk. Nimir Industrial Chemical is currently generating about 0.0 per unit of risk. If you would invest 20,320 in Meezan Bank on January 20, 2024 and sell it today you would earn a total of 1,580 from holding Meezan Bank or generate 7.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 78.95% |
Values | Daily Returns |
Meezan Bank vs. Nimir Industrial Chemical
Performance |
Timeline |
Meezan Bank |
Nimir Industrial Chemical |
Meezan Bank and Nimir Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meezan Bank and Nimir Industrial
The main advantage of trading using opposite Meezan Bank and Nimir Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meezan Bank position performs unexpectedly, Nimir Industrial 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 Nimir Industrial will offset losses from the drop in Nimir Industrial's long position.Meezan Bank vs. Modaraba Al Mali | Meezan Bank vs. Fauji FoodsLtd | Meezan Bank vs. KSB Pumps | Meezan Bank vs. Mari Petroleum |
Nimir Industrial vs. Modaraba Al Mali | Nimir Industrial vs. Fauji FoodsLtd | Nimir Industrial vs. KSB Pumps | Nimir Industrial 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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