Correlation Between Al Tawfeek and Ismailia Development
Can any of the company-specific risk be diversified away by investing in both Al Tawfeek and Ismailia Development 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 Ismailia Development 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 Ismailia Development and, you can compare the effects of market volatilities on Al Tawfeek and Ismailia Development 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 Ismailia Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Tawfeek and Ismailia Development.
Diversification Opportunities for Al Tawfeek and Ismailia Development
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATLC and Ismailia is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Al Tawfeek Leasing and Ismailia Development and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ismailia Development and 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 Ismailia Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ismailia Development and has no effect on the direction of Al Tawfeek i.e., Al Tawfeek and Ismailia Development go up and down completely randomly.
Pair Corralation between Al Tawfeek and Ismailia Development
Assuming the 90 days trading horizon Al Tawfeek Leasing is expected to generate 1.01 times more return on investment than Ismailia Development. However, Al Tawfeek is 1.01 times more volatile than Ismailia Development and. It trades about 0.1 of its potential returns per unit of risk. Ismailia Development and is currently generating about -0.02 per unit of risk. If you would invest 433.00 in Al Tawfeek Leasing on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Al Tawfeek Leasing or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Tawfeek Leasing vs. Ismailia Development and
Performance |
| Timeline |
| Al Tawfeek Leasing |
| Ismailia Development and |
Al Tawfeek and Ismailia Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Tawfeek and Ismailia Development
The main advantage of trading using opposite Al Tawfeek and Ismailia Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Tawfeek position performs unexpectedly, Ismailia Development 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 Ismailia Development will offset losses from the drop in Ismailia Development'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 |
| Ismailia Development vs. Arabia Investments Holding | Ismailia Development vs. Nile City Investment | Ismailia Development vs. Orascom Investment Holding | Ismailia Development vs. Arab Moltaka Investments |
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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