Correlation Between Golden Textiles and Ibnsina Pharma
Can any of the company-specific risk be diversified away by investing in both Golden Textiles and Ibnsina Pharma 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 Golden Textiles and Ibnsina Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Textiles Clothes and Ibnsina Pharma, you can compare the effects of market volatilities on Golden Textiles and Ibnsina Pharma 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 Golden Textiles with a short position of Ibnsina Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Textiles and Ibnsina Pharma.
Diversification Opportunities for Golden Textiles and Ibnsina Pharma
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Ibnsina is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Golden Textiles Clothes and Ibnsina Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibnsina Pharma and Golden Textiles 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 Golden Textiles Clothes are associated (or correlated) with Ibnsina Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibnsina Pharma has no effect on the direction of Golden Textiles i.e., Golden Textiles and Ibnsina Pharma go up and down completely randomly.
Pair Corralation between Golden Textiles and Ibnsina Pharma
Assuming the 90 days trading horizon Golden Textiles Clothes is expected to generate 1.1 times more return on investment than Ibnsina Pharma. However, Golden Textiles is 1.1 times more volatile than Ibnsina Pharma. It trades about 0.1 of its potential returns per unit of risk. Ibnsina Pharma is currently generating about 0.1 per unit of risk. If you would invest 718.00 in Golden Textiles Clothes on September 19, 2024 and sell it today you would earn a total of 1,926 from holding Golden Textiles Clothes or generate 268.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Textiles Clothes vs. Ibnsina Pharma
Performance |
| Timeline |
| Golden Textiles Clothes |
| Ibnsina Pharma |
Golden Textiles and Ibnsina Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Textiles and Ibnsina Pharma
The main advantage of trading using opposite Golden Textiles and Ibnsina Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Textiles position performs unexpectedly, Ibnsina Pharma 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 Ibnsina Pharma will offset losses from the drop in Ibnsina Pharma's long position.| Golden Textiles vs. Paint Chemicals Industries | Golden Textiles vs. Reacap Financial Investments | Golden Textiles vs. Egyptians For Investment | Golden Textiles vs. Misr Oils Soap |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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