Correlation Between Al Arafa and Commercial International
Can any of the company-specific risk be diversified away by investing in both Al Arafa and Commercial International 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 Arafa and Commercial International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Arafa Investment and Commercial International Bank Egypt, you can compare the effects of market volatilities on Al Arafa and Commercial International 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 Arafa with a short position of Commercial International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Arafa and Commercial International.
Diversification Opportunities for Al Arafa and Commercial International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIVCB and Commercial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Al Arafa Investment and Commercial International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial International and Al Arafa 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 Arafa Investment are associated (or correlated) with Commercial International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial International has no effect on the direction of Al Arafa i.e., Al Arafa and Commercial International go up and down completely randomly.
Pair Corralation between Al Arafa and Commercial International
If you would invest 5,300 in Commercial International Bank Egypt on August 31, 2024 and sell it today you would earn a total of 2,840 from holding Commercial International Bank Egypt or generate 53.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Al Arafa Investment vs. Commercial International Bank
Performance |
| Timeline |
| Al Arafa Investment |
| Commercial International |
Al Arafa and Commercial International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Arafa and Commercial International
The main advantage of trading using opposite Al Arafa and Commercial International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Arafa position performs unexpectedly, Commercial International 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 Commercial International will offset losses from the drop in Commercial International's long position.| Al Arafa vs. Paint Chemicals Industries | Al Arafa vs. Reacap Financial Investments | Al Arafa vs. Egyptians For Investment | Al Arafa 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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