Correlation Between El Ahli and Alexandria New
Can any of the company-specific risk be diversified away by investing in both El Ahli and Alexandria New 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 El Ahli and Alexandria New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Ahli Investment and Alexandria New Medical, you can compare the effects of market volatilities on El Ahli and Alexandria New 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 El Ahli with a short position of Alexandria New. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Ahli and Alexandria New.
Diversification Opportunities for El Ahli and Alexandria New
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AFDI and Alexandria is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding El Ahli Investment and Alexandria New Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria New Medical and El Ahli 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 El Ahli Investment are associated (or correlated) with Alexandria New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria New Medical has no effect on the direction of El Ahli i.e., El Ahli and Alexandria New go up and down completely randomly.
Pair Corralation between El Ahli and Alexandria New
Assuming the 90 days trading horizon El Ahli Investment is expected to generate 0.76 times more return on investment than Alexandria New. However, El Ahli Investment is 1.31 times less risky than Alexandria New. It trades about 0.05 of its potential returns per unit of risk. Alexandria New Medical is currently generating about 0.0 per unit of risk. If you would invest 1,755 in El Ahli Investment on November 6, 2024 and sell it today you would earn a total of 1,162 from holding El Ahli Investment or generate 66.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.74% |
| Values | Daily Returns |
El Ahli Investment vs. Alexandria New Medical
Performance |
| Timeline |
| El Ahli Investment |
| Alexandria New Medical |
El Ahli and Alexandria New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Ahli and Alexandria New
The main advantage of trading using opposite El Ahli and Alexandria New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Ahli position performs unexpectedly, Alexandria New 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 Alexandria New will offset losses from the drop in Alexandria New's long position.| El Ahli vs. Dice Sport Casual | El Ahli vs. Export Development Bank | El Ahli vs. Misr Oils Soap | El Ahli vs. Arabian Food Industries |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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