Correlation Between Commercial International and Al Baraka
Can any of the company-specific risk be diversified away by investing in both Commercial International and Al Baraka 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 Commercial International and Al Baraka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial International Bank Egypt and Al Baraka Bank, you can compare the effects of market volatilities on Commercial International and Al Baraka 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 Commercial International with a short position of Al Baraka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial International and Al Baraka.
Diversification Opportunities for Commercial International and Al Baraka
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commercial and SAUD is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank and Al Baraka Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Baraka Bank and Commercial International 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 Commercial International Bank Egypt are associated (or correlated) with Al Baraka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Baraka Bank has no effect on the direction of Commercial International i.e., Commercial International and Al Baraka go up and down completely randomly.
Pair Corralation between Commercial International and Al Baraka
Assuming the 90 days trading horizon Commercial International Bank Egypt is expected to generate 0.86 times more return on investment than Al Baraka. However, Commercial International Bank Egypt is 1.16 times less risky than Al Baraka. It trades about 0.07 of its potential returns per unit of risk. Al Baraka Bank is currently generating about -0.19 per unit of risk. If you would invest 8,020 in Commercial International Bank Egypt on September 3, 2024 and sell it today you would earn a total of 120.00 from holding Commercial International Bank Egypt or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial International Bank vs. Al Baraka Bank
Performance |
| Timeline |
| Commercial International |
| Al Baraka Bank |
Commercial International and Al Baraka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial International and Al Baraka
The main advantage of trading using opposite Commercial International and Al Baraka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International position performs unexpectedly, Al Baraka 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 Baraka will offset losses from the drop in Al Baraka's long position.The idea behind Commercial International Bank Egypt and Al Baraka Bank 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.
| Al Baraka vs. Delta Insurance | Al Baraka vs. Juhayna Food Industries | Al Baraka vs. Misr Oils Soap | Al Baraka vs. Sidi Kerir Petrochemicals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |