Correlation Between B Investments and Al Arafa
Can any of the company-specific risk be diversified away by investing in both B Investments and Al Arafa 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 B Investments and Al Arafa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Investments Holding and Al Arafa Investment, you can compare the effects of market volatilities on B Investments and Al Arafa 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 B Investments with a short position of Al Arafa. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Investments and Al Arafa.
Diversification Opportunities for B Investments and Al Arafa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BINV and AIVCB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding B Investments Holding and Al Arafa Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Arafa Investment and B Investments 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 B Investments Holding are associated (or correlated) with Al Arafa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Arafa Investment has no effect on the direction of B Investments i.e., B Investments and Al Arafa go up and down completely randomly.
Pair Corralation between B Investments and Al Arafa
If you would invest 1,990 in B Investments Holding on September 4, 2024 and sell it today you would earn a total of 540.00 from holding B Investments Holding or generate 27.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Investments Holding vs. Al Arafa Investment
Performance |
| Timeline |
| B Investments Holding |
| Al Arafa Investment |
B Investments and Al Arafa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Investments and Al Arafa
The main advantage of trading using opposite B Investments and Al Arafa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Investments position performs unexpectedly, Al Arafa 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 Al Arafa will offset losses from the drop in Al Arafa's long position.| B Investments vs. Paint Chemicals Industries | B Investments vs. Egyptians For Investment | B Investments vs. Misr Oils Soap | B Investments vs. Global Telecom Holding |
| Al Arafa vs. Paint Chemicals Industries | Al Arafa vs. Egyptians For Investment | Al Arafa vs. Misr Oils Soap | Al Arafa 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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