Correlation Between El Nasr and Arabian Food
Can any of the company-specific risk be diversified away by investing in both El Nasr and Arabian Food 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 Arabian Food 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 Arabian Food Industries, you can compare the effects of market volatilities on El Nasr and Arabian Food 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 Arabian Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Nasr and Arabian Food.
Diversification Opportunities for El Nasr and Arabian Food
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KABO and Arabian is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding El Nasr Clothes and Arabian Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arabian Food Industries 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 Arabian Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arabian Food Industries has no effect on the direction of El Nasr i.e., El Nasr and Arabian Food go up and down completely randomly.
Pair Corralation between El Nasr and Arabian Food
Assuming the 90 days trading horizon El Nasr Clothes is expected to generate 6.01 times more return on investment than Arabian Food. However, El Nasr is 6.01 times more volatile than Arabian Food Industries. It trades about 0.4 of its potential returns per unit of risk. Arabian Food Industries is currently generating about 0.03 per unit of risk. If you would invest 282.00 in El Nasr Clothes on September 5, 2024 and sell it today you would earn a total of 112.00 from holding El Nasr Clothes or generate 39.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Nasr Clothes vs. Arabian Food Industries
Performance |
| Timeline |
| El Nasr Clothes |
| Arabian Food Industries |
El Nasr and Arabian Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Nasr and Arabian Food
The main advantage of trading using opposite El Nasr and Arabian Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Nasr position performs unexpectedly, Arabian Food 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 Arabian Food will offset losses from the drop in Arabian Food's long position.| El Nasr vs. Misr Oils Soap | El Nasr vs. Global Telecom Holding | El Nasr vs. Qatar Natl Bank | El Nasr vs. Al Tawfeek Leasing |
| Arabian Food vs. Speed Medical | Arabian Food vs. Egyptian Media Production | Arabian Food vs. Cairo For Investment | Arabian Food 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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