Correlation Between Fawry For and Natural Gas
Can any of the company-specific risk be diversified away by investing in both Fawry For and Natural Gas 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 Fawry For and Natural Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fawry For Banking and Natural Gas Mining, you can compare the effects of market volatilities on Fawry For and Natural Gas 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 Fawry For with a short position of Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fawry For and Natural Gas.
Diversification Opportunities for Fawry For and Natural Gas
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fawry and Natural is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fawry For Banking and Natural Gas Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Mining and Fawry For 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 Fawry For Banking are associated (or correlated) with Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Mining has no effect on the direction of Fawry For i.e., Fawry For and Natural Gas go up and down completely randomly.
Pair Corralation between Fawry For and Natural Gas
Assuming the 90 days trading horizon Fawry For Banking is expected to generate 0.81 times more return on investment than Natural Gas. However, Fawry For Banking is 1.23 times less risky than Natural Gas. It trades about 0.07 of its potential returns per unit of risk. Natural Gas Mining is currently generating about 0.02 per unit of risk. If you would invest 591.00 in Fawry For Banking on September 14, 2024 and sell it today you would earn a total of 289.00 from holding Fawry For Banking or generate 48.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fawry For Banking vs. Natural Gas Mining
Performance |
| Timeline |
| Fawry For Banking |
| Natural Gas Mining |
Fawry For and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fawry For and Natural Gas
The main advantage of trading using opposite Fawry For and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fawry For position performs unexpectedly, Natural Gas 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 Natural Gas will offset losses from the drop in Natural Gas' long position.| Fawry For vs. Arabia Investments Holding | Fawry For vs. Juhayna Food Industries | Fawry For vs. Nile City Investment | Fawry For vs. ODIN Investments |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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