Correlation Between Misr National and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Misr National and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Misr National and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr National and Dow Jones.
Diversification Opportunities for Misr National and Dow Jones
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Misr and Dow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Misr National Steel and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Misr National i.e., Misr National and Dow Jones go up and down completely randomly.
Pair Corralation between Misr National and Dow Jones
Assuming the 90 days trading horizon Misr National Steel is expected to generate 6.37 times more return on investment than Dow Jones. However, Misr National is 6.37 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 120.00 in Misr National Steel on August 30, 2024 and sell it today you would earn a total of 407.00 from holding Misr National Steel or generate 339.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.82% |
| Values | Daily Returns |
Misr National Steel vs. Dow Jones Industrial
Performance |
| Timeline |
Misr National and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Misr National Steel
Pair trading matchups for Misr National
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Misr National and Dow Jones
The main advantage of trading using opposite Misr National and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr National position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Misr National vs. Paint Chemicals Industries | Misr National vs. Misr Oils Soap | Misr National vs. Global Telecom Holding | Misr National vs. Qatar Natl Bank |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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