Correlation Between Misr National and Emaar Misr
Can any of the company-specific risk be diversified away by investing in both Misr National and Emaar Misr 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 Emaar Misr 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 Emaar Misr for, you can compare the effects of market volatilities on Misr National and Emaar Misr 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 Emaar Misr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr National and Emaar Misr.
Diversification Opportunities for Misr National and Emaar Misr
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Misr and Emaar is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Misr National Steel and Emaar Misr for in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emaar Misr for 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 Emaar Misr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emaar Misr for has no effect on the direction of Misr National i.e., Misr National and Emaar Misr go up and down completely randomly.
Pair Corralation between Misr National and Emaar Misr
Assuming the 90 days trading horizon Misr National Steel is expected to generate 1.2 times more return on investment than Emaar Misr. However, Misr National is 1.2 times more volatile than Emaar Misr for. It trades about 0.11 of its potential returns per unit of risk. Emaar Misr for is currently generating about 0.1 per unit of risk. If you would invest 191.00 in Misr National Steel on September 24, 2024 and sell it today you would earn a total of 335.00 from holding Misr National Steel or generate 175.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr National Steel vs. Emaar Misr for
Performance |
| Timeline |
| Misr National Steel |
| Emaar Misr for |
Misr National and Emaar Misr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr National and Emaar Misr
The main advantage of trading using opposite Misr National and Emaar Misr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr National position performs unexpectedly, Emaar Misr 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 Emaar Misr will offset losses from the drop in Emaar Misr's long position.| Misr National vs. Memphis Pharmaceuticals | Misr National vs. Paint Chemicals Industries | Misr National vs. Egyptians For Investment | Misr National vs. Global Telecom Holding |
| Emaar Misr vs. Memphis Pharmaceuticals | Emaar Misr vs. Paint Chemicals Industries | Emaar Misr vs. Egyptians For Investment | Emaar Misr vs. Global Telecom 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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