Correlation Between Misr Hotels and Natural Gas
Can any of the company-specific risk be diversified away by investing in both Misr Hotels and Natural Gas 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 Natural Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Hotels and Natural Gas Mining, you can compare the effects of market volatilities on Misr Hotels and Natural Gas 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 Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Hotels and Natural Gas.
Diversification Opportunities for Misr Hotels and Natural Gas
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Misr and Natural is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Misr Hotels and Natural Gas Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Mining 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 Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Mining has no effect on the direction of Misr Hotels i.e., Misr Hotels and Natural Gas go up and down completely randomly.
Pair Corralation between Misr Hotels and Natural Gas
Assuming the 90 days trading horizon Misr Hotels is expected to generate 1.43 times more return on investment than Natural Gas. However, Misr Hotels is 1.43 times more volatile than Natural Gas Mining. It trades about 0.06 of its potential returns per unit of risk. Natural Gas Mining is currently generating about -0.03 per unit of risk. If you would invest 2,873 in Misr Hotels on November 4, 2024 and sell it today you would earn a total of 51.00 from holding Misr Hotels or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Hotels vs. Natural Gas Mining
Performance |
| Timeline |
| Misr Hotels |
| Natural Gas Mining |
Misr Hotels and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Hotels and Natural Gas
The main advantage of trading using opposite Misr Hotels and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Hotels position performs unexpectedly, Natural Gas 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 Natural Gas will offset losses from the drop in Natural Gas' 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 |
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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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