Correlation Between El Nasr and Act Financial
Can any of the company-specific risk be diversified away by investing in both El Nasr and Act Financial 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 El Nasr and Act Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Nasr Clothes and Act Financial, you can compare the effects of market volatilities on El Nasr and Act Financial 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 El Nasr with a short position of Act Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Nasr and Act Financial.
Diversification Opportunities for El Nasr and Act Financial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between KABO and Act is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding El Nasr Clothes and Act Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Act Financial and El Nasr 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 El Nasr Clothes are associated (or correlated) with Act Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Act Financial has no effect on the direction of El Nasr i.e., El Nasr and Act Financial go up and down completely randomly.
Pair Corralation between El Nasr and Act Financial
Assuming the 90 days trading horizon El Nasr Clothes is expected to generate 1.04 times more return on investment than Act Financial. However, El Nasr is 1.04 times more volatile than Act Financial. It trades about 0.07 of its potential returns per unit of risk. Act Financial is currently generating about -0.03 per unit of risk. If you would invest 196.00 in El Nasr Clothes on September 14, 2024 and sell it today you would earn a total of 195.00 from holding El Nasr Clothes or generate 99.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 20.21% |
| Values | Daily Returns |
El Nasr Clothes vs. Act Financial
Performance |
| Timeline |
| El Nasr Clothes |
| Act Financial |
El Nasr and Act Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Nasr and Act Financial
The main advantage of trading using opposite El Nasr and Act Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Nasr position performs unexpectedly, Act Financial 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 Act Financial will offset losses from the drop in Act Financial's long position.| El Nasr vs. Act Financial | El Nasr vs. Arab Moltaka Investments | El Nasr vs. Egyptian Gulf Bank | El Nasr vs. Odin for Investment |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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