Correlation Between Dice Sport and Misr Hotels
Can any of the company-specific risk be diversified away by investing in both Dice Sport and Misr Hotels 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 Dice Sport and Misr Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dice Sport Casual and Misr Hotels, you can compare the effects of market volatilities on Dice Sport and Misr Hotels 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 Dice Sport with a short position of Misr Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dice Sport and Misr Hotels.
Diversification Opportunities for Dice Sport and Misr Hotels
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dice and Misr is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dice Sport Casual and Misr Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr Hotels and Dice Sport 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 Dice Sport Casual are associated (or correlated) with Misr Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr Hotels has no effect on the direction of Dice Sport i.e., Dice Sport and Misr Hotels go up and down completely randomly.
Pair Corralation between Dice Sport and Misr Hotels
Assuming the 90 days trading horizon Dice Sport Casual is expected to generate 0.41 times more return on investment than Misr Hotels. However, Dice Sport Casual is 2.45 times less risky than Misr Hotels. It trades about 0.12 of its potential returns per unit of risk. Misr Hotels is currently generating about 0.04 per unit of risk. If you would invest 48.00 in Dice Sport Casual on September 3, 2024 and sell it today you would earn a total of 160.00 from holding Dice Sport Casual or generate 333.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dice Sport Casual vs. Misr Hotels
Performance |
| Timeline |
| Dice Sport Casual |
| Misr Hotels |
Dice Sport and Misr Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dice Sport and Misr Hotels
The main advantage of trading using opposite Dice Sport and Misr Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dice Sport position performs unexpectedly, Misr Hotels 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 Misr Hotels will offset losses from the drop in Misr Hotels' long position.| Dice Sport vs. Paint Chemicals Industries | Dice Sport vs. Egyptians For Investment | Dice Sport vs. Misr Oils Soap | Dice Sport vs. Global Telecom Holding |
| Misr Hotels vs. Paint Chemicals Industries | Misr Hotels vs. Egyptians For Investment | Misr Hotels vs. Misr Oils Soap | Misr Hotels 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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