Correlation Between Al Khair and Alexandria New
Can any of the company-specific risk be diversified away by investing in both Al Khair and Alexandria New 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 Al Khair and Alexandria New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Khair River and Alexandria New Medical, you can compare the effects of market volatilities on Al Khair and Alexandria New 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 Al Khair with a short position of Alexandria New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Khair and Alexandria New.
Diversification Opportunities for Al Khair and Alexandria New
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between KRDI and Alexandria is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Al Khair River and Alexandria New Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria New Medical and Al Khair 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 Al Khair River are associated (or correlated) with Alexandria New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria New Medical has no effect on the direction of Al Khair i.e., Al Khair and Alexandria New go up and down completely randomly.
Pair Corralation between Al Khair and Alexandria New
Assuming the 90 days trading horizon Al Khair River is expected to generate 1.75 times more return on investment than Alexandria New. However, Al Khair is 1.75 times more volatile than Alexandria New Medical. It trades about 0.25 of its potential returns per unit of risk. Alexandria New Medical is currently generating about -0.12 per unit of risk. If you would invest 57.00 in Al Khair River on November 5, 2024 and sell it today you would earn a total of 7.00 from holding Al Khair River or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Khair River vs. Alexandria New Medical
Performance |
| Timeline |
| Al Khair River |
| Alexandria New Medical |
Al Khair and Alexandria New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Khair and Alexandria New
The main advantage of trading using opposite Al Khair and Alexandria New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Khair position performs unexpectedly, Alexandria New 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 Alexandria New will offset losses from the drop in Alexandria New's long position.| Al Khair vs. Assiut Islamic Trading | Al Khair vs. Reacap Financial Investments | Al Khair vs. El Nasr Clothes | Al Khair vs. Union National Bank |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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