Correlation Between Misr Hotels and Industrial Engineering
Can any of the company-specific risk be diversified away by investing in both Misr Hotels and Industrial Engineering 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 Industrial Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Hotels and Industrial Engineering Projects, you can compare the effects of market volatilities on Misr Hotels and Industrial Engineering 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 Industrial Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Hotels and Industrial Engineering.
Diversification Opportunities for Misr Hotels and Industrial Engineering
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Misr and Industrial is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Misr Hotels and Industrial Engineering Project in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Engineering 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 Industrial Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Engineering has no effect on the direction of Misr Hotels i.e., Misr Hotels and Industrial Engineering go up and down completely randomly.
Pair Corralation between Misr Hotels and Industrial Engineering
Assuming the 90 days trading horizon Misr Hotels is expected to generate 1.38 times more return on investment than Industrial Engineering. However, Misr Hotels is 1.38 times more volatile than Industrial Engineering Projects. It trades about 0.09 of its potential returns per unit of risk. Industrial Engineering Projects is currently generating about -0.13 per unit of risk. If you would invest 3,109 in Misr Hotels on September 13, 2024 and sell it today you would earn a total of 94.00 from holding Misr Hotels or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Hotels vs. Industrial Engineering Project
Performance |
| Timeline |
| Misr Hotels |
| Industrial Engineering |
Misr Hotels and Industrial Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Hotels and Industrial Engineering
The main advantage of trading using opposite Misr Hotels and Industrial Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Hotels position performs unexpectedly, Industrial Engineering 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 Industrial Engineering will offset losses from the drop in Industrial Engineering's long position.| Misr Hotels vs. Sidi Kerir Petrochemicals | Misr Hotels vs. The Arab Dairy | Misr Hotels vs. B Investments Holding | Misr Hotels vs. Al Arafa Investment |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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