Correlation Between El Nasr and Arab Moltaka
Can any of the company-specific risk be diversified away by investing in both El Nasr and Arab Moltaka 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 Arab Moltaka 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 Arab Moltaka Investments, you can compare the effects of market volatilities on El Nasr and Arab Moltaka 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 Arab Moltaka. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Nasr and Arab Moltaka.
Diversification Opportunities for El Nasr and Arab Moltaka
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between KABO and Arab is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding El Nasr Clothes and Arab Moltaka Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arab Moltaka Investments 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 Arab Moltaka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arab Moltaka Investments has no effect on the direction of El Nasr i.e., El Nasr and Arab Moltaka go up and down completely randomly.
Pair Corralation between El Nasr and Arab Moltaka
Assuming the 90 days trading horizon El Nasr Clothes is expected to generate 1.03 times more return on investment than Arab Moltaka. However, El Nasr is 1.03 times more volatile than Arab Moltaka Investments. It trades about 0.31 of its potential returns per unit of risk. Arab Moltaka Investments is currently generating about -0.03 per unit of risk. If you would invest 385.00 in El Nasr Clothes on October 27, 2024 and sell it today you would earn a total of 55.00 from holding El Nasr Clothes or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Nasr Clothes vs. Arab Moltaka Investments
Performance |
| Timeline |
| El Nasr Clothes |
| Arab Moltaka Investments |
El Nasr and Arab Moltaka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Nasr and Arab Moltaka
The main advantage of trading using opposite El Nasr and Arab Moltaka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Nasr position performs unexpectedly, Arab Moltaka 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 Moltaka will offset losses from the drop in Arab Moltaka's long position.| El Nasr vs. Arabia Investments Holding | El Nasr vs. El Ahli Investment | El Nasr vs. Saudi Egyptian Investment | El Nasr vs. Egyptian Chemical Industries |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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