Correlation Between El Ahli and Digitize For
Can any of the company-specific risk be diversified away by investing in both El Ahli and Digitize For 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 Digitize For 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 Digitize for Investment, you can compare the effects of market volatilities on El Ahli and Digitize For 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 Digitize For. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Ahli and Digitize For.
Diversification Opportunities for El Ahli and Digitize For
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AFDI and Digitize is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding El Ahli Investment and Digitize for Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digitize for Investment 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 Digitize For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digitize for Investment has no effect on the direction of El Ahli i.e., El Ahli and Digitize For go up and down completely randomly.
Pair Corralation between El Ahli and Digitize For
Assuming the 90 days trading horizon El Ahli is expected to generate 6.3 times less return on investment than Digitize For. But when comparing it to its historical volatility, El Ahli Investment is 3.78 times less risky than Digitize For. It trades about 0.05 of its potential returns per unit of risk. Digitize for Investment is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Digitize for Investment on October 12, 2024 and sell it today you would earn a total of 315.00 from holding Digitize for Investment or generate 1500.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.13% |
| Values | Daily Returns |
El Ahli Investment vs. Digitize for Investment
Performance |
| Timeline |
| El Ahli Investment |
| Digitize for Investment |
El Ahli and Digitize For Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Ahli and Digitize For
The main advantage of trading using opposite El Ahli and Digitize For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Ahli position performs unexpectedly, Digitize For 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 Digitize For will offset losses from the drop in Digitize For's long position.| El Ahli vs. Al Arafa Investment | El Ahli vs. Cairo For Investment | El Ahli vs. Natural Gas Mining | El Ahli vs. Inter Cairo For Aluminum |
| Digitize For vs. Misr Oils Soap | Digitize For vs. Faisal Islamic Bank | Digitize For vs. Union National Bank | Digitize For vs. Egyptian Transport |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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