Correlation Between Misr National and Arabia Investments
Can any of the company-specific risk be diversified away by investing in both Misr National and Arabia Investments 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 Misr National and Arabia Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr National Steel and Arabia Investments Holding, you can compare the effects of market volatilities on Misr National and Arabia Investments 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 Misr National with a short position of Arabia Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr National and Arabia Investments.
Diversification Opportunities for Misr National and Arabia Investments
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Misr and Arabia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Misr National Steel and Arabia Investments Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arabia Investments and Misr National 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 Misr National Steel are associated (or correlated) with Arabia Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arabia Investments has no effect on the direction of Misr National i.e., Misr National and Arabia Investments go up and down completely randomly.
Pair Corralation between Misr National and Arabia Investments
Assuming the 90 days trading horizon Misr National Steel is expected to generate 1.36 times more return on investment than Arabia Investments. However, Misr National is 1.36 times more volatile than Arabia Investments Holding. It trades about 0.11 of its potential returns per unit of risk. Arabia Investments Holding is currently generating about 0.05 per unit of risk. If you would invest 121.00 in Misr National Steel on November 6, 2024 and sell it today you would earn a total of 439.00 from holding Misr National Steel or generate 362.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.55% |
| Values | Daily Returns |
Misr National Steel vs. Arabia Investments Holding
Performance |
| Timeline |
| Misr National Steel |
| Arabia Investments |
Misr National and Arabia Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr National and Arabia Investments
The main advantage of trading using opposite Misr National and Arabia Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr National position performs unexpectedly, Arabia Investments 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 Arabia Investments will offset losses from the drop in Arabia Investments' long position.| Misr National vs. Egyptians For Investment | Misr National vs. Al Arafa Investment | Misr National vs. Atlas For Investment | Misr National vs. Nile City Investment |
| Arabia Investments vs. Industrial Engineering Projects | Arabia Investments vs. Arab Aluminum | Arabia Investments vs. Alexandria New Medical | Arabia Investments vs. Paint Chemicals Industries |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |