Correlation Between Al Tawfeek and Misr National
Can any of the company-specific risk be diversified away by investing in both Al Tawfeek and Misr National 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 Tawfeek and Misr National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Tawfeek Leasing and Misr National Steel, you can compare the effects of market volatilities on Al Tawfeek and Misr National 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 Tawfeek with a short position of Misr National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Tawfeek and Misr National.
Diversification Opportunities for Al Tawfeek and Misr National
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ATLC and Misr is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Al Tawfeek Leasing and Misr National Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr National Steel and Al Tawfeek 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 Tawfeek Leasing are associated (or correlated) with Misr National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr National Steel has no effect on the direction of Al Tawfeek i.e., Al Tawfeek and Misr National go up and down completely randomly.
Pair Corralation between Al Tawfeek and Misr National
Assuming the 90 days trading horizon Al Tawfeek is expected to generate 13.73 times less return on investment than Misr National. But when comparing it to its historical volatility, Al Tawfeek Leasing is 1.44 times less risky than Misr National. It trades about 0.01 of its potential returns per unit of risk. Misr National Steel is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Misr National Steel on October 12, 2024 and sell it today you would earn a total of 423.00 from holding Misr National Steel or generate 338.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Tawfeek Leasing vs. Misr National Steel
Performance |
| Timeline |
| Al Tawfeek Leasing |
| Misr National Steel |
Al Tawfeek and Misr National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Tawfeek and Misr National
The main advantage of trading using opposite Al Tawfeek and Misr National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Tawfeek position performs unexpectedly, Misr National 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 National will offset losses from the drop in Misr National's long position.| Al Tawfeek vs. Paint Chemicals Industries | Al Tawfeek vs. Reacap Financial Investments | Al Tawfeek vs. Egyptians For Investment | Al Tawfeek vs. Misr Oils Soap |
| Misr National vs. Reacap Financial Investments | Misr National vs. The United Bank | Misr National vs. Credit Agricole Egypt | Misr National vs. Contact Financial Holding |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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