Correlation Between Al Arafa and Nile City
Can any of the company-specific risk be diversified away by investing in both Al Arafa and Nile City 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 Nile City 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 Nile City Investment, you can compare the effects of market volatilities on Al Arafa and Nile City 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 Nile City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Arafa and Nile City.
Diversification Opportunities for Al Arafa and Nile City
No risk reduction
The 3 months correlation between AIVCB and Nile is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Al Arafa Investment and Nile City Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nile City Investment 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 Nile City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nile City Investment has no effect on the direction of Al Arafa i.e., Al Arafa and Nile City go up and down completely randomly.
Pair Corralation between Al Arafa and Nile City
If you would invest 34,428 in Nile City Investment on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Nile City Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 86.16% |
| Values | Daily Returns |
Al Arafa Investment vs. Nile City Investment
Performance |
| Timeline |
| Al Arafa Investment |
| Nile City Investment |
Al Arafa and Nile City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Arafa and Nile City
The main advantage of trading using opposite Al Arafa and Nile City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Arafa position performs unexpectedly, Nile City 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 Nile City will offset losses from the drop in Nile City's long position.| Al Arafa vs. Nile City Investment | Al Arafa vs. Atlas For Investment | Al Arafa vs. Cleopatra Hospital | Al Arafa vs. Sidi Kerir Petrochemicals |
| Nile City vs. Union National Bank | Nile City vs. Fawry For Banking | Nile City vs. Credit Agricole Egypt | Nile City vs. Egypt Aluminum |
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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