Correlation Between Cairo Oils and Zahraa Maadi
Can any of the company-specific risk be diversified away by investing in both Cairo Oils and Zahraa Maadi 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 Cairo Oils and Zahraa Maadi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairo Oils Soap and Zahraa Maadi Investment, you can compare the effects of market volatilities on Cairo Oils and Zahraa Maadi 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 Cairo Oils with a short position of Zahraa Maadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Oils and Zahraa Maadi.
Diversification Opportunities for Cairo Oils and Zahraa Maadi
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cairo and Zahraa is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Oils Soap and Zahraa Maadi Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zahraa Maadi Investment and Cairo Oils 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 Cairo Oils Soap are associated (or correlated) with Zahraa Maadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zahraa Maadi Investment has no effect on the direction of Cairo Oils i.e., Cairo Oils and Zahraa Maadi go up and down completely randomly.
Pair Corralation between Cairo Oils and Zahraa Maadi
Assuming the 90 days trading horizon Cairo Oils Soap is expected to generate 1.28 times more return on investment than Zahraa Maadi. However, Cairo Oils is 1.28 times more volatile than Zahraa Maadi Investment. It trades about 0.08 of its potential returns per unit of risk. Zahraa Maadi Investment is currently generating about -0.02 per unit of risk. If you would invest 13.00 in Cairo Oils Soap on November 28, 2024 and sell it today you would earn a total of 26.00 from holding Cairo Oils Soap or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Oils Soap vs. Zahraa Maadi Investment
Performance |
| Timeline |
| Cairo Oils Soap |
| Zahraa Maadi Investment |
Cairo Oils and Zahraa Maadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Oils and Zahraa Maadi
The main advantage of trading using opposite Cairo Oils and Zahraa Maadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Oils position performs unexpectedly, Zahraa Maadi 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 Zahraa Maadi will offset losses from the drop in Zahraa Maadi's long position.| Cairo Oils vs. Assiut Islamic Trading | Cairo Oils vs. Cleopatra Hospital | Cairo Oils vs. Nile City Investment | Cairo Oils vs. Digitize for Investment |
| Zahraa Maadi vs. Paint Chemicals Industries | Zahraa Maadi vs. Egyptians For Investment | Zahraa Maadi vs. Global Telecom Holding | Zahraa Maadi vs. Al Tawfeek Leasing |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |