Correlation Between Arabia Investments and El Nasr
Can any of the company-specific risk be diversified away by investing in both Arabia Investments and El Nasr 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 Arabia Investments and El Nasr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arabia Investments Holding and El Nasr Clothes, you can compare the effects of market volatilities on Arabia Investments and El Nasr 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 Arabia Investments with a short position of El Nasr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arabia Investments and El Nasr.
Diversification Opportunities for Arabia Investments and El Nasr
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arabia and KABO is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Arabia Investments Holding and El Nasr Clothes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Nasr Clothes and Arabia Investments 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 Arabia Investments Holding are associated (or correlated) with El Nasr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Nasr Clothes has no effect on the direction of Arabia Investments i.e., Arabia Investments and El Nasr go up and down completely randomly.
Pair Corralation between Arabia Investments and El Nasr
Assuming the 90 days trading horizon Arabia Investments Holding is expected to under-perform the El Nasr. In addition to that, Arabia Investments is 1.0 times more volatile than El Nasr Clothes. It trades about -0.22 of its total potential returns per unit of risk. El Nasr Clothes is currently generating about 0.38 per unit of volatility. If you would invest 420.00 in El Nasr Clothes on November 6, 2024 and sell it today you would earn a total of 54.00 from holding El Nasr Clothes or generate 12.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Arabia Investments Holding vs. El Nasr Clothes
Performance |
Timeline |
Arabia Investments |
El Nasr Clothes |
Arabia Investments and El Nasr Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arabia Investments and El Nasr
The main advantage of trading using opposite Arabia Investments and El Nasr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arabia Investments position performs unexpectedly, El Nasr 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 El Nasr will offset losses from the drop in El Nasr's long position.Arabia Investments vs. Al Tawfeek Leasing | Arabia Investments vs. Arab Moltaka Investments | Arabia Investments vs. Al Arafa Investment | Arabia Investments vs. Egypt Aluminum |
El Nasr vs. Paint Chemicals Industries | El Nasr vs. Reacap Financial Investments | El Nasr vs. Egyptians For Investment | El Nasr 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |