Correlation Between Ismailia National and Misr Oils
Can any of the company-specific risk be diversified away by investing in both Ismailia National 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 Ismailia National and Misr Oils 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 Misr Oils Soap, you can compare the effects of market volatilities on Ismailia National 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 Ismailia National with a short position of Misr Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ismailia National and Misr Oils.
Diversification Opportunities for Ismailia National and Misr Oils
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ismailia and Misr is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ismailia National Food 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 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 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 Ismailia National i.e., Ismailia National and Misr Oils go up and down completely randomly.
Pair Corralation between Ismailia National and Misr Oils
Assuming the 90 days trading horizon Ismailia National Food is expected to under-perform the Misr Oils. But the stock apears to be less risky and, when comparing its historical volatility, Ismailia National Food is 1.03 times less risky than Misr Oils. The stock trades about -0.03 of its potential returns per unit of risk. The Misr Oils Soap is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,000 in Misr Oils Soap on September 1, 2024 and sell it today you would earn a total of 210.00 from holding Misr Oils Soap or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ismailia National Food vs. Misr Oils Soap
Performance |
| Timeline |
| Ismailia National Food |
| Misr Oils Soap |
Ismailia National and Misr Oils Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ismailia National and Misr Oils
The main advantage of trading using opposite Ismailia National and Misr Oils positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ismailia National 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.| Ismailia National vs. Paint Chemicals Industries | Ismailia National vs. Egyptians For Investment | Ismailia National vs. Misr Oils Soap | Ismailia National vs. Global Telecom Holding |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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