Correlation Between B Investments and Palm Hills
Can any of the company-specific risk be diversified away by investing in both B Investments and Palm Hills 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 Palm Hills 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 Palm Hills Development, you can compare the effects of market volatilities on B Investments and Palm Hills 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 Palm Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Investments and Palm Hills.
Diversification Opportunities for B Investments and Palm Hills
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between BINV and Palm is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding B Investments Holding and Palm Hills Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palm Hills Development 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 Palm Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palm Hills Development has no effect on the direction of B Investments i.e., B Investments and Palm Hills go up and down completely randomly.
Pair Corralation between B Investments and Palm Hills
Assuming the 90 days trading horizon B Investments Holding is expected to generate 0.82 times more return on investment than Palm Hills. However, B Investments Holding is 1.23 times less risky than Palm Hills. It trades about -0.01 of its potential returns per unit of risk. Palm Hills Development is currently generating about -0.21 per unit of risk. If you would invest 2,563 in B Investments Holding on August 28, 2024 and sell it today you would lose (18.00) from holding B Investments Holding or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Investments Holding vs. Palm Hills Development
Performance |
| Timeline |
| B Investments Holding |
| Palm Hills Development |
B Investments and Palm Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Investments and Palm Hills
The main advantage of trading using opposite B Investments and Palm Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Investments position performs unexpectedly, Palm Hills 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 Palm Hills will offset losses from the drop in Palm Hills' long position.| B Investments vs. Al Tawfeek Leasing | B Investments vs. Nile City Investment | B Investments vs. Misr Chemical Industries | B Investments vs. Gadwa For Industrial |
| Palm Hills vs. Al Arafa Investment | Palm Hills vs. Delta Construction Rebuilding | Palm Hills vs. Arabia Investments Holding | Palm Hills vs. B Investments 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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