Correlation Between Al Khair and Reacap Financial
Can any of the company-specific risk be diversified away by investing in both Al Khair and Reacap 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 Al Khair and Reacap Financial 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 Reacap Financial Investments, you can compare the effects of market volatilities on Al Khair and Reacap 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 Al Khair with a short position of Reacap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Khair and Reacap Financial.
Diversification Opportunities for Al Khair and Reacap Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KRDI and Reacap is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Al Khair River and Reacap Financial Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reacap Financial Inv 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 Reacap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reacap Financial Inv has no effect on the direction of Al Khair i.e., Al Khair and Reacap Financial go up and down completely randomly.
Pair Corralation between Al Khair and Reacap Financial
Assuming the 90 days trading horizon Al Khair River is expected to generate 0.89 times more return on investment than Reacap Financial. However, Al Khair River is 1.12 times less risky than Reacap Financial. It trades about 0.12 of its potential returns per unit of risk. Reacap Financial Investments is currently generating about -0.02 per unit of risk. If you would invest 51.00 in Al Khair River on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Al Khair River or generate 5.88% 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. Reacap Financial Investments
Performance |
| Timeline |
| Al Khair River |
| Reacap Financial Inv |
Al Khair and Reacap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Khair and Reacap Financial
The main advantage of trading using opposite Al Khair and Reacap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Khair position performs unexpectedly, Reacap 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 Reacap Financial will offset losses from the drop in Reacap Financial's long position.| Al Khair vs. Paint Chemicals Industries | Al Khair vs. Reacap Financial Investments | Al Khair vs. Egyptians For Investment | Al Khair vs. Misr Oils Soap |
| Reacap Financial vs. Paint Chemicals Industries | Reacap Financial vs. Egyptians For Investment | Reacap Financial vs. Misr Oils Soap | Reacap Financial 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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