Correlation Between Juhayna Food and Arab Dairy
Can any of the company-specific risk be diversified away by investing in both Juhayna Food and Arab Dairy 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 Juhayna Food and Arab Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juhayna Food Industries and The Arab Dairy, you can compare the effects of market volatilities on Juhayna Food and Arab Dairy 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 Juhayna Food with a short position of Arab Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juhayna Food and Arab Dairy.
Diversification Opportunities for Juhayna Food and Arab Dairy
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Juhayna and Arab is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Juhayna Food Industries and The Arab Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arab Dairy and Juhayna Food 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 Juhayna Food Industries are associated (or correlated) with Arab Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arab Dairy has no effect on the direction of Juhayna Food i.e., Juhayna Food and Arab Dairy go up and down completely randomly.
Pair Corralation between Juhayna Food and Arab Dairy
Assuming the 90 days trading horizon Juhayna Food Industries is expected to generate 1.11 times more return on investment than Arab Dairy. However, Juhayna Food is 1.11 times more volatile than The Arab Dairy. It trades about 0.11 of its potential returns per unit of risk. The Arab Dairy is currently generating about 0.09 per unit of risk. If you would invest 1,444 in Juhayna Food Industries on November 28, 2024 and sell it today you would earn a total of 2,241 from holding Juhayna Food Industries or generate 155.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Juhayna Food Industries vs. The Arab Dairy
Performance |
| Timeline |
| Juhayna Food Industries |
| Arab Dairy |
Juhayna Food and Arab Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juhayna Food and Arab Dairy
The main advantage of trading using opposite Juhayna Food and Arab Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juhayna Food position performs unexpectedly, Arab Dairy 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 Arab Dairy will offset losses from the drop in Arab Dairy's long position.| Juhayna Food vs. ODIN Investments | Juhayna Food vs. Nozha International Hospital | Juhayna Food vs. Misr Financial Investments | Juhayna Food vs. Speed Medical |
| Arab Dairy vs. Egyptian Iron Steel | Arab Dairy vs. Alexandria New Medical | Arab Dairy vs. Medical Packaging | Arab Dairy 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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