Correlation Between Ismailia National and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Ismailia National and Dow Jones 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 Ismailia National and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ismailia National Food and Dow Jones Industrial, you can compare the effects of market volatilities on Ismailia National and Dow Jones 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 Ismailia National with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ismailia National and Dow Jones.
Diversification Opportunities for Ismailia National and Dow Jones
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ismailia and Dow is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ismailia National Food and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Ismailia National 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 Ismailia National Food are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Ismailia National i.e., Ismailia National and Dow Jones go up and down completely randomly.
Pair Corralation between Ismailia National and Dow Jones
Assuming the 90 days trading horizon Ismailia National Food is expected to generate 6.08 times more return on investment than Dow Jones. However, Ismailia National is 6.08 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 3,210 in Ismailia National Food on September 3, 2024 and sell it today you would earn a total of 3,049 from holding Ismailia National Food or generate 94.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.98% |
| Values | Daily Returns |
Ismailia National Food vs. Dow Jones Industrial
Performance |
| Timeline |
Ismailia National and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ismailia National Food
Pair trading matchups for Ismailia National
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ismailia National and Dow Jones
The main advantage of trading using opposite Ismailia National and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ismailia National position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Ismailia National vs. Misr Financial Investments | Ismailia National vs. QALA For Financial | Ismailia National vs. Egyptians For Investment | Ismailia National vs. Credit Agricole Egypt |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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