Correlation Between Misr Hotels and Misr National
Can any of the company-specific risk be diversified away by investing in both Misr Hotels and Misr National 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 Misr National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Hotels and Misr National Steel, you can compare the effects of market volatilities on Misr Hotels and Misr National 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 Misr National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Hotels and Misr National.
Diversification Opportunities for Misr Hotels and Misr National
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Misr and Misr is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Misr Hotels and Misr National Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr National Steel 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 Misr National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr National Steel has no effect on the direction of Misr Hotels i.e., Misr Hotels and Misr National go up and down completely randomly.
Pair Corralation between Misr Hotels and Misr National
Assuming the 90 days trading horizon Misr Hotels is expected to generate 4.69 times less return on investment than Misr National. In addition to that, Misr Hotels is 1.06 times more volatile than Misr National Steel. It trades about 0.06 of its total potential returns per unit of risk. Misr National Steel is currently generating about 0.28 per unit of volatility. If you would invest 521.00 in Misr National Steel on November 4, 2024 and sell it today you would earn a total of 54.00 from holding Misr National Steel or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Hotels vs. Misr National Steel
Performance |
| Timeline |
| Misr Hotels |
| Misr National Steel |
Misr Hotels and Misr National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Hotels and Misr National
The main advantage of trading using opposite Misr Hotels and Misr National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Hotels position performs unexpectedly, Misr National 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 Misr National will offset losses from the drop in Misr National's long position.| Misr Hotels vs. Paint Chemicals Industries | Misr Hotels vs. Reacap Financial Investments | Misr Hotels vs. Egyptians For Investment | Misr Hotels vs. Misr Oils Soap |
| Misr National vs. Misr Financial Investments | Misr National vs. Misr Hotels | Misr National vs. Inter Cairo For Aluminum | Misr National vs. Reacap Financial Investments |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |