Correlation Between International Agricultural and Misr Oils
Can any of the company-specific risk be diversified away by investing in both International Agricultural and Misr Oils 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 International Agricultural and Misr Oils into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Agricultural Products and Misr Oils Soap, you can compare the effects of market volatilities on International Agricultural and Misr Oils 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 International Agricultural with a short position of Misr Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Agricultural and Misr Oils.
Diversification Opportunities for International Agricultural and Misr Oils
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Misr is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding International Agricultural Pro and Misr Oils Soap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr Oils Soap and International Agricultural 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 International Agricultural Products are associated (or correlated) with Misr Oils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr Oils Soap has no effect on the direction of International Agricultural i.e., International Agricultural and Misr Oils go up and down completely randomly.
Pair Corralation between International Agricultural and Misr Oils
Assuming the 90 days trading horizon International Agricultural Products is expected to generate 1.73 times more return on investment than Misr Oils. However, International Agricultural is 1.73 times more volatile than Misr Oils Soap. It trades about 0.08 of its potential returns per unit of risk. Misr Oils Soap is currently generating about 0.12 per unit of risk. If you would invest 868.00 in International Agricultural Products on September 2, 2024 and sell it today you would earn a total of 1,054 from holding International Agricultural Products or generate 121.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Agricultural Pro vs. Misr Oils Soap
Performance |
| Timeline |
| International Agricultural |
| Misr Oils Soap |
International Agricultural and Misr Oils Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Agricultural and Misr Oils
The main advantage of trading using opposite International Agricultural and Misr Oils positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Agricultural position performs unexpectedly, Misr Oils 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 Misr Oils will offset losses from the drop in Misr Oils' long position.| International Agricultural vs. Egyptians For Investment | International Agricultural vs. Misr Oils Soap | International Agricultural vs. Global Telecom Holding | International Agricultural vs. Qatar Natl Bank |
| Misr Oils vs. Egyptians For Investment | Misr Oils vs. Global Telecom Holding | Misr Oils vs. Qatar Natl Bank | Misr Oils vs. Orascom Construction PLC |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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