Correlation Between Juhayna Food and Palm Hills
Can any of the company-specific risk be diversified away by investing in both Juhayna Food and Palm Hills 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 Palm Hills 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 Palm Hills Development, you can compare the effects of market volatilities on Juhayna Food and Palm Hills 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 Palm Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juhayna Food and Palm Hills.
Diversification Opportunities for Juhayna Food and Palm Hills
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Juhayna and Palm is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Juhayna Food Industries and Palm Hills Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palm Hills Development 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 Palm Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palm Hills Development has no effect on the direction of Juhayna Food i.e., Juhayna Food and Palm Hills go up and down completely randomly.
Pair Corralation between Juhayna Food and Palm Hills
Assuming the 90 days trading horizon Juhayna Food Industries is expected to generate 1.14 times more return on investment than Palm Hills. However, Juhayna Food is 1.14 times more volatile than Palm Hills Development. It trades about 0.12 of its potential returns per unit of risk. Palm Hills Development is currently generating about 0.11 per unit of risk. If you would invest 1,658 in Juhayna Food Industries on August 28, 2024 and sell it today you would earn a total of 1,629 from holding Juhayna Food Industries or generate 98.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.38% |
| Values | Daily Returns |
Juhayna Food Industries vs. Palm Hills Development
Performance |
| Timeline |
| Juhayna Food Industries |
| Palm Hills Development |
Juhayna Food and Palm Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juhayna Food and Palm Hills
The main advantage of trading using opposite Juhayna Food and Palm Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juhayna Food position performs unexpectedly, Palm Hills 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 Palm Hills will offset losses from the drop in Palm Hills' long position.| Juhayna Food vs. Egyptian Financial Industrial | Juhayna Food vs. Sidi Kerir Petrochemicals | Juhayna Food vs. Sharkia National Food | Juhayna Food vs. Arabian Food Industries |
| Palm Hills vs. Al Arafa Investment | Palm Hills vs. Delta Construction Rebuilding | Palm Hills vs. Arabia Investments Holding | Palm Hills vs. B Investments 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 CEOs Directory module to screen CEOs from public companies around the world.
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