Correlation Between Golden Textiles and Juhayna Food
Can any of the company-specific risk be diversified away by investing in both Golden Textiles and Juhayna Food 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 Juhayna Food 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 Juhayna Food Industries, you can compare the effects of market volatilities on Golden Textiles and Juhayna Food 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 Juhayna Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Textiles and Juhayna Food.
Diversification Opportunities for Golden Textiles and Juhayna Food
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Juhayna is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Golden Textiles Clothes and Juhayna Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juhayna Food Industries 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 Juhayna Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juhayna Food Industries has no effect on the direction of Golden Textiles i.e., Golden Textiles and Juhayna Food go up and down completely randomly.
Pair Corralation between Golden Textiles and Juhayna Food
Assuming the 90 days trading horizon Golden Textiles is expected to generate 3.0 times less return on investment than Juhayna Food. But when comparing it to its historical volatility, Golden Textiles Clothes is 1.26 times less risky than Juhayna Food. It trades about 0.06 of its potential returns per unit of risk. Juhayna Food Industries is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,541 in Juhayna Food Industries on August 30, 2024 and sell it today you would earn a total of 631.00 from holding Juhayna Food Industries or generate 24.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Textiles Clothes vs. Juhayna Food Industries
Performance |
| Timeline |
| Golden Textiles Clothes |
| Juhayna Food Industries |
Golden Textiles and Juhayna Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Textiles and Juhayna Food
The main advantage of trading using opposite Golden Textiles and Juhayna Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Textiles position performs unexpectedly, Juhayna Food 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 Juhayna Food will offset losses from the drop in Juhayna Food's long position.| Golden Textiles vs. Paint Chemicals Industries | Golden Textiles vs. Misr Oils Soap | Golden Textiles vs. Global Telecom Holding | Golden Textiles vs. Qatar Natl Bank |
| Juhayna Food vs. Paint Chemicals Industries | Juhayna Food vs. Misr Oils Soap | Juhayna Food vs. Global Telecom Holding | Juhayna Food vs. Qatar Natl Bank |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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