Correlation Between Al Arafa and Natural Gas
Can any of the company-specific risk be diversified away by investing in both Al Arafa and Natural Gas 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 Natural Gas 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 Natural Gas Mining, you can compare the effects of market volatilities on Al Arafa and Natural Gas 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 Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Arafa and Natural Gas.
Diversification Opportunities for Al Arafa and Natural Gas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIVCB and Natural is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Al Arafa Investment and Natural Gas Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Mining 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 Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Mining has no effect on the direction of Al Arafa i.e., Al Arafa and Natural Gas go up and down completely randomly.
Pair Corralation between Al Arafa and Natural Gas
If you would invest 3,842 in Natural Gas Mining on September 24, 2024 and sell it today you would lose (11.00) from holding Natural Gas Mining or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 76.42% |
| Values | Daily Returns |
Al Arafa Investment vs. Natural Gas Mining
Performance |
| Timeline |
| Al Arafa Investment |
| Natural Gas Mining |
Al Arafa and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Arafa and Natural Gas
The main advantage of trading using opposite Al Arafa and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Arafa position performs unexpectedly, Natural Gas 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 Natural Gas will offset losses from the drop in Natural Gas' long position.| Al Arafa vs. Memphis Pharmaceuticals | Al Arafa vs. Paint Chemicals Industries | Al Arafa vs. Egyptians For Investment | Al Arafa vs. Global Telecom Holding |
| Natural Gas vs. Egyptian Transport | Natural Gas vs. Al Tawfeek Leasing | Natural Gas vs. Odin for Investment | Natural Gas vs. Cairo For Investment |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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