Correlation Between Al Aqar and Amalgamated Industrial
Can any of the company-specific risk be diversified away by investing in both Al Aqar and Amalgamated 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 Al Aqar and Amalgamated Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Aqar Healthcare and Amalgamated Industrial Steel, you can compare the effects of market volatilities on Al Aqar and Amalgamated 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 Al Aqar with a short position of Amalgamated Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Aqar and Amalgamated Industrial.
Diversification Opportunities for Al Aqar and Amalgamated Industrial
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5116 and Amalgamated is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Al Aqar Healthcare and Amalgamated Industrial Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amalgamated Industrial and Al Aqar 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 Al Aqar Healthcare are associated (or correlated) with Amalgamated Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amalgamated Industrial has no effect on the direction of Al Aqar i.e., Al Aqar and Amalgamated Industrial go up and down completely randomly.
Pair Corralation between Al Aqar and Amalgamated Industrial
Assuming the 90 days trading horizon Al Aqar is expected to generate 14.95 times less return on investment than Amalgamated Industrial. But when comparing it to its historical volatility, Al Aqar Healthcare is 5.52 times less risky than Amalgamated Industrial. It trades about 0.03 of its potential returns per unit of risk. Amalgamated Industrial Steel is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Amalgamated Industrial Steel on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Amalgamated Industrial Steel or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Aqar Healthcare vs. Amalgamated Industrial Steel
Performance |
| Timeline |
| Al Aqar Healthcare |
| Amalgamated Industrial |
Al Aqar and Amalgamated Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Aqar and Amalgamated Industrial
The main advantage of trading using opposite Al Aqar and Amalgamated Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Aqar position performs unexpectedly, Amalgamated 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 Amalgamated Industrial will offset losses from the drop in Amalgamated Industrial's long position.| Al Aqar vs. PMB Technology Bhd | Al Aqar vs. Tex Cycle Technology | Al Aqar vs. Cosmos Technology International | Al Aqar vs. YX Precious Metals |
| Amalgamated Industrial vs. Fitters Diversified Bhd | Amalgamated Industrial vs. Al Aqar Healthcare | Amalgamated Industrial vs. PMB Technology Bhd | Amalgamated Industrial vs. Digistar Bhd |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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