Correlation Between Misr Hotels and Arab Dairy
Can any of the company-specific risk be diversified away by investing in both Misr Hotels and Arab Dairy 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 Misr Hotels and Arab Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Hotels and The Arab Dairy, you can compare the effects of market volatilities on Misr Hotels and Arab Dairy 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 Misr Hotels with a short position of Arab Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Hotels and Arab Dairy.
Diversification Opportunities for Misr Hotels and Arab Dairy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Misr and Arab is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Misr Hotels and The Arab Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arab Dairy and Misr Hotels 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 Misr Hotels are associated (or correlated) with Arab Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arab Dairy has no effect on the direction of Misr Hotels i.e., Misr Hotels and Arab Dairy go up and down completely randomly.
Pair Corralation between Misr Hotels and Arab Dairy
Assuming the 90 days trading horizon Misr Hotels is expected to generate 1.32 times more return on investment than Arab Dairy. However, Misr Hotels is 1.32 times more volatile than The Arab Dairy. It trades about 0.06 of its potential returns per unit of risk. The Arab Dairy is currently generating about -0.04 per unit of risk. If you would invest 2,901 in Misr Hotels on November 28, 2024 and sell it today you would earn a total of 59.00 from holding Misr Hotels or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Hotels vs. The Arab Dairy
Performance |
| Timeline |
| Misr Hotels |
| Arab Dairy |
Misr Hotels and Arab Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Hotels and Arab Dairy
The main advantage of trading using opposite Misr Hotels and Arab Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Hotels position performs unexpectedly, Arab Dairy 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 Dairy will offset losses from the drop in Arab Dairy's long position.| Misr Hotels vs. Odin for Investment | Misr Hotels vs. The Arab Dairy | Misr Hotels vs. Sharkia National Food | Misr Hotels vs. Gadwa For Industrial |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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