Correlation Between Grand Investment and El Ahli
Can any of the company-specific risk be diversified away by investing in both Grand Investment and El Ahli 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 Grand Investment and El Ahli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Investment Capital and El Ahli Investment, you can compare the effects of market volatilities on Grand Investment and El Ahli 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 Grand Investment with a short position of El Ahli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Investment and El Ahli.
Diversification Opportunities for Grand Investment and El Ahli
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grand and AFDI is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Grand Investment Capital and El Ahli Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Ahli Investment and Grand Investment 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 Grand Investment Capital are associated (or correlated) with El Ahli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Ahli Investment has no effect on the direction of Grand Investment i.e., Grand Investment and El Ahli go up and down completely randomly.
Pair Corralation between Grand Investment and El Ahli
Assuming the 90 days trading horizon Grand Investment is expected to generate 1.88 times less return on investment than El Ahli. But when comparing it to its historical volatility, Grand Investment Capital is 1.44 times less risky than El Ahli. It trades about 0.04 of its potential returns per unit of risk. El Ahli Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,844 in El Ahli Investment on October 14, 2024 and sell it today you would earn a total of 1,127 from holding El Ahli Investment or generate 61.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Investment Capital vs. El Ahli Investment
Performance |
| Timeline |
| Grand Investment Capital |
| El Ahli Investment |
Grand Investment and El Ahli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Investment and El Ahli
The main advantage of trading using opposite Grand Investment and El Ahli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Investment position performs unexpectedly, El Ahli 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 El Ahli will offset losses from the drop in El Ahli's long position.| Grand Investment vs. Misr Chemical Industries | Grand Investment vs. Digitize for Investment | Grand Investment vs. Arabia Investments Holding | Grand Investment vs. Misr Financial Investments |
| El Ahli vs. Arabia Investments Holding | El Ahli vs. Grand Investment Capital | El Ahli vs. Egyptian Transport | El Ahli vs. Al Arafa Investment |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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