Correlation Between Misr National and Global Telecom

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Can any of the company-specific risk be diversified away by investing in both Misr National and Global Telecom 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 Global Telecom 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 Global Telecom Holding, you can compare the effects of market volatilities on Misr National and Global Telecom 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 Global Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr National and Global Telecom.

Diversification Opportunities for Misr National and Global Telecom

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Misr and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Misr National Steel and Global Telecom Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Telecom Holding 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 Global Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Telecom Holding has no effect on the direction of Misr National i.e., Misr National and Global Telecom go up and down completely randomly.

Pair Corralation between Misr National and Global Telecom

If you would invest  127.00  in Misr National Steel on September 24, 2024 and sell it today you would earn a total of  399.00  from holding Misr National Steel or generate 314.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy76.42%
ValuesDaily Returns

Misr National Steel  vs.  Global Telecom Holding

 Performance 
       Timeline  
Misr National Steel 

Risk-Adjusted Performance

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Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Misr National Steel are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Misr National reported solid returns over the last few months and may actually be approaching a breakup point.
Global Telecom Holding 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Global Telecom Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Global Telecom is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Misr National and Global Telecom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Misr National and Global Telecom

The main advantage of trading using opposite Misr National and Global Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr National position performs unexpectedly, Global Telecom 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 Global Telecom will offset losses from the drop in Global Telecom's long position.
The idea behind Misr National Steel and Global Telecom Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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