Correlation Between Al Aqar and EA Technique
Can any of the company-specific risk be diversified away by investing in both Al Aqar and EA Technique 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 EA Technique 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 EA Technique M, you can compare the effects of market volatilities on Al Aqar and EA Technique 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 EA Technique. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Aqar and EA Technique.
Diversification Opportunities for Al Aqar and EA Technique
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 5116 and 5259 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Al Aqar Healthcare and EA Technique M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Technique M 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 EA Technique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Technique M has no effect on the direction of Al Aqar i.e., Al Aqar and EA Technique go up and down completely randomly.
Pair Corralation between Al Aqar and EA Technique
Assuming the 90 days trading horizon Al Aqar is expected to generate 7.03 times less return on investment than EA Technique. But when comparing it to its historical volatility, Al Aqar Healthcare is 5.1 times less risky than EA Technique. It trades about 0.04 of its potential returns per unit of risk. EA Technique M is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 16.00 in EA Technique M on August 31, 2024 and sell it today you would earn a total of 14.00 from holding EA Technique M or generate 87.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Al Aqar Healthcare vs. EA Technique M
Performance |
| Timeline |
| Al Aqar Healthcare |
| EA Technique M |
Al Aqar and EA Technique Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Aqar and EA Technique
The main advantage of trading using opposite Al Aqar and EA Technique positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Aqar position performs unexpectedly, EA Technique 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 EA Technique will offset losses from the drop in EA Technique's long position.| Al Aqar vs. YTL Hospitality REIT | Al Aqar vs. Digistar Bhd | Al Aqar vs. Minetech Resources Bhd | Al Aqar vs. Swift Haulage Bhd |
| EA Technique vs. Digistar Bhd | EA Technique vs. Minetech Resources Bhd | EA Technique vs. Swift Haulage Bhd | EA Technique vs. Bina Darulaman 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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