Correlation Between Misr Hotels and Iron
Can any of the company-specific risk be diversified away by investing in both Misr Hotels and Iron 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 Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Hotels and Iron And Steel, you can compare the effects of market volatilities on Misr Hotels and Iron 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 Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Hotels and Iron.
Diversification Opportunities for Misr Hotels and Iron
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Misr and Iron is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Misr Hotels and Iron And Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron And 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 Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron And Steel has no effect on the direction of Misr Hotels i.e., Misr Hotels and Iron go up and down completely randomly.
Pair Corralation between Misr Hotels and Iron
Assuming the 90 days trading horizon Misr Hotels is expected to generate 3.64 times less return on investment than Iron. But when comparing it to its historical volatility, Misr Hotels is 1.33 times less risky than Iron. It trades about 0.06 of its potential returns per unit of risk. Iron And Steel is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Iron And Steel on November 4, 2024 and sell it today you would earn a total of 30.00 from holding Iron And Steel or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Hotels vs. Iron And Steel
Performance |
| Timeline |
| Misr Hotels |
| Iron And Steel |
Misr Hotels and Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Hotels and Iron
The main advantage of trading using opposite Misr Hotels and Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Hotels position performs unexpectedly, Iron 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 Iron will offset losses from the drop in Iron'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 |
| Iron vs. International Agricultural Products | Iron vs. Edita Food Industries | Iron vs. Arabian Food Industries | Iron vs. Arab Aluminum |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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