Correlation Between Juhayna Food and Misr Chemical
Can any of the company-specific risk be diversified away by investing in both Juhayna Food and Misr Chemical 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 Misr Chemical 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 Misr Chemical Industries, you can compare the effects of market volatilities on Juhayna Food and Misr Chemical 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 Misr Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juhayna Food and Misr Chemical.
Diversification Opportunities for Juhayna Food and Misr Chemical
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Juhayna and Misr is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Juhayna Food Industries and Misr Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr Chemical Industries 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 Misr Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr Chemical Industries has no effect on the direction of Juhayna Food i.e., Juhayna Food and Misr Chemical go up and down completely randomly.
Pair Corralation between Juhayna Food and Misr Chemical
Assuming the 90 days trading horizon Juhayna Food Industries is expected to generate 0.75 times more return on investment than Misr Chemical. However, Juhayna Food Industries is 1.33 times less risky than Misr Chemical. It trades about 0.11 of its potential returns per unit of risk. Misr Chemical Industries is currently generating about -0.23 per unit of risk. If you would invest 3,165 in Juhayna Food Industries on September 4, 2024 and sell it today you would earn a total of 164.00 from holding Juhayna Food Industries or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Juhayna Food Industries vs. Misr Chemical Industries
Performance |
| Timeline |
| Juhayna Food Industries |
| Misr Chemical Industries |
Juhayna Food and Misr Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juhayna Food and Misr Chemical
The main advantage of trading using opposite Juhayna Food and Misr Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juhayna Food position performs unexpectedly, Misr Chemical 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 Chemical will offset losses from the drop in Misr Chemical's long position.| Juhayna Food vs. Paint Chemicals Industries | Juhayna Food vs. Egyptians For Investment | Juhayna Food vs. Misr Oils Soap | Juhayna Food vs. Global Telecom Holding |
| Misr Chemical vs. Paint Chemicals Industries | Misr Chemical vs. Egyptians For Investment | Misr Chemical vs. Misr Oils Soap | Misr Chemical vs. Global Telecom Holding |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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