Correlation Between Act Financial and Al Khair
Can any of the company-specific risk be diversified away by investing in both Act Financial and Al Khair 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 Act Financial and Al Khair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Act Financial and Al Khair River, you can compare the effects of market volatilities on Act Financial and Al Khair 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 Act Financial with a short position of Al Khair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Act Financial and Al Khair.
Diversification Opportunities for Act Financial and Al Khair
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Act and KRDI is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Act Financial and Al Khair River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Khair River and Act Financial 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 Act Financial are associated (or correlated) with Al Khair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Khair River has no effect on the direction of Act Financial i.e., Act Financial and Al Khair go up and down completely randomly.
Pair Corralation between Act Financial and Al Khair
Assuming the 90 days trading horizon Act Financial is expected to under-perform the Al Khair. In addition to that, Act Financial is 1.24 times more volatile than Al Khair River. It trades about -0.01 of its total potential returns per unit of risk. Al Khair River is currently generating about -0.01 per unit of volatility. If you would invest 63.00 in Al Khair River on October 26, 2024 and sell it today you would lose (3.00) from holding Al Khair River or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.04% |
| Values | Daily Returns |
Act Financial vs. Al Khair River
Performance |
| Timeline |
| Act Financial |
| Al Khair River |
Act Financial and Al Khair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Act Financial and Al Khair
The main advantage of trading using opposite Act Financial and Al Khair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Act Financial position performs unexpectedly, Al Khair 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 Al Khair will offset losses from the drop in Al Khair's long position.| Act Financial vs. Paint Chemicals Industries | Act Financial vs. Reacap Financial Investments | Act Financial vs. Egyptians For Investment | Act Financial vs. Misr Oils Soap |
| Al Khair vs. Paint Chemicals Industries | Al Khair vs. Reacap Financial Investments | Al Khair vs. Egyptians For Investment | Al Khair vs. Misr Oils Soap |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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