Correlation Between Al Tawfeek and Misr Oils
Can any of the company-specific risk be diversified away by investing in both Al Tawfeek 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 Al Tawfeek and Misr Oils 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 Oils Soap, you can compare the effects of market volatilities on Al Tawfeek 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 Al Tawfeek with a short position of Misr Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Tawfeek and Misr Oils.
Diversification Opportunities for Al Tawfeek and Misr Oils
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATLC and Misr is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Al Tawfeek Leasing 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 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 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 Al Tawfeek i.e., Al Tawfeek and Misr Oils go up and down completely randomly.
Pair Corralation between Al Tawfeek and Misr Oils
Assuming the 90 days trading horizon Al Tawfeek Leasing is expected to under-perform the Misr Oils. In addition to that, Al Tawfeek is 1.04 times more volatile than Misr Oils Soap. It trades about -0.22 of its total potential returns per unit of risk. Misr Oils Soap is currently generating about -0.14 per unit of volatility. If you would invest 5,896 in Misr Oils Soap on November 5, 2024 and sell it today you would lose (207.00) from holding Misr Oils Soap or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Tawfeek Leasing vs. Misr Oils Soap
Performance |
| Timeline |
| Al Tawfeek Leasing |
| Misr Oils Soap |
Al Tawfeek and Misr Oils Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Tawfeek and Misr Oils
The main advantage of trading using opposite Al Tawfeek and Misr Oils positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Tawfeek 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.| Al Tawfeek vs. Cairo For Investment | Al Tawfeek vs. Misr Financial Investments | Al Tawfeek vs. Nile City Investment | Al Tawfeek vs. Egyptian Financial Industrial |
| Misr Oils vs. Egyptian Transport | Misr Oils vs. Nile City Investment | Misr Oils vs. Telecom Egypt | Misr Oils vs. Orascom Investment 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |