Correlation Between Golden Textiles and Mohandes Insurance
Can any of the company-specific risk be diversified away by investing in both Golden Textiles and Mohandes Insurance 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 Mohandes Insurance 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 Mohandes Insurance, you can compare the effects of market volatilities on Golden Textiles and Mohandes Insurance 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 Mohandes Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Textiles and Mohandes Insurance.
Diversification Opportunities for Golden Textiles and Mohandes Insurance
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Mohandes is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Golden Textiles Clothes and Mohandes Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mohandes Insurance 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 Mohandes Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mohandes Insurance has no effect on the direction of Golden Textiles i.e., Golden Textiles and Mohandes Insurance go up and down completely randomly.
Pair Corralation between Golden Textiles and Mohandes Insurance
Assuming the 90 days trading horizon Golden Textiles Clothes is expected to generate 1.45 times more return on investment than Mohandes Insurance. However, Golden Textiles is 1.45 times more volatile than Mohandes Insurance. It trades about -0.06 of its potential returns per unit of risk. Mohandes Insurance is currently generating about -0.24 per unit of risk. If you would invest 2,683 in Golden Textiles Clothes on November 28, 2024 and sell it today you would lose (65.00) from holding Golden Textiles Clothes or give up 2.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Textiles Clothes vs. Mohandes Insurance
Performance |
| Timeline |
| Golden Textiles Clothes |
| Mohandes Insurance |
Golden Textiles and Mohandes Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Textiles and Mohandes Insurance
The main advantage of trading using opposite Golden Textiles and Mohandes Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Textiles position performs unexpectedly, Mohandes Insurance 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 Mohandes Insurance will offset losses from the drop in Mohandes Insurance's long position.| Golden Textiles vs. ODIN Investments | Golden Textiles vs. Egyptians For Investment | Golden Textiles vs. Atlas For Investment | Golden Textiles vs. Egypt Aluminum |
| Mohandes Insurance vs. Misr National Steel | Mohandes Insurance vs. Dice Sport Casual | Mohandes Insurance vs. Credit Agricole Egypt | Mohandes Insurance 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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