Correlation Between Medical Packaging and El Nasr
Can any of the company-specific risk be diversified away by investing in both Medical Packaging and El Nasr 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 Medical Packaging and El Nasr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Packaging and El Nasr Clothes, you can compare the effects of market volatilities on Medical Packaging and El Nasr 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 Medical Packaging with a short position of El Nasr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Packaging and El Nasr.
Diversification Opportunities for Medical Packaging and El Nasr
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medical and KABO is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Medical Packaging and El Nasr Clothes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Nasr Clothes and Medical Packaging 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 Medical Packaging are associated (or correlated) with El Nasr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Nasr Clothes has no effect on the direction of Medical Packaging i.e., Medical Packaging and El Nasr go up and down completely randomly.
Pair Corralation between Medical Packaging and El Nasr
Assuming the 90 days trading horizon Medical Packaging is expected to under-perform the El Nasr. But the stock apears to be less risky and, when comparing its historical volatility, Medical Packaging is 2.94 times less risky than El Nasr. The stock trades about -0.22 of its potential returns per unit of risk. The El Nasr Clothes is currently generating about 0.4 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Packaging vs. El Nasr Clothes
Performance |
| Timeline |
| Medical Packaging |
| El Nasr Clothes |
Medical Packaging and El Nasr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Packaging and El Nasr
The main advantage of trading using opposite Medical Packaging and El Nasr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Packaging position performs unexpectedly, El Nasr 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 El Nasr will offset losses from the drop in El Nasr's long position.| Medical Packaging vs. Misr Oils Soap | Medical Packaging vs. Global Telecom Holding | Medical Packaging vs. Qatar Natl Bank | Medical Packaging vs. Al Tawfeek Leasing |
| El Nasr vs. Misr Oils Soap | El Nasr vs. Global Telecom Holding | El Nasr vs. Qatar Natl Bank | El Nasr vs. Al Tawfeek Leasing |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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