Correlation Between AJWA For and Misr Oils
Can any of the company-specific risk be diversified away by investing in both AJWA For and Misr Oils 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 AJWA For and Misr Oils into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJWA for Food and Misr Oils Soap, you can compare the effects of market volatilities on AJWA For and Misr Oils 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 AJWA For with a short position of Misr Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJWA For and Misr Oils.
Diversification Opportunities for AJWA For and Misr Oils
Very good diversification
The 3 months correlation between AJWA and Misr is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AJWA for Food and Misr Oils Soap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr Oils Soap and AJWA For 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 AJWA for Food are associated (or correlated) with Misr Oils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr Oils Soap has no effect on the direction of AJWA For i.e., AJWA For and Misr Oils go up and down completely randomly.
Pair Corralation between AJWA For and Misr Oils
Assuming the 90 days trading horizon AJWA for Food is expected to generate 1.43 times more return on investment than Misr Oils. However, AJWA For is 1.43 times more volatile than Misr Oils Soap. It trades about 0.12 of its potential returns per unit of risk. Misr Oils Soap is currently generating about 0.12 per unit of risk. If you would invest 2,025 in AJWA for Food on September 2, 2024 and sell it today you would earn a total of 4,886 from holding AJWA for Food or generate 241.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJWA for Food vs. Misr Oils Soap
Performance |
| Timeline |
| AJWA for Food |
| Misr Oils Soap |
AJWA For and Misr Oils Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJWA For and Misr Oils
The main advantage of trading using opposite AJWA For and Misr Oils positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJWA For position performs unexpectedly, Misr Oils 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 Misr Oils will offset losses from the drop in Misr Oils' long position.| AJWA For vs. National Bank | AJWA For vs. Golden Textiles Clothes | AJWA For vs. Juhayna Food Industries | AJWA For vs. Housing Development Bank |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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