Correlation Between Misr Hotels and Pyramisa Hotels
Can any of the company-specific risk be diversified away by investing in both Misr Hotels and Pyramisa Hotels 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 Pyramisa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Hotels and Pyramisa Hotels, you can compare the effects of market volatilities on Misr Hotels and Pyramisa Hotels 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 Pyramisa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Hotels and Pyramisa Hotels.
Diversification Opportunities for Misr Hotels and Pyramisa Hotels
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Misr and Pyramisa is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Misr Hotels and Pyramisa Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyramisa Hotels 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 Pyramisa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyramisa Hotels has no effect on the direction of Misr Hotels i.e., Misr Hotels and Pyramisa Hotels go up and down completely randomly.
Pair Corralation between Misr Hotels and Pyramisa Hotels
Assuming the 90 days trading horizon Misr Hotels is expected to generate 1.07 times less return on investment than Pyramisa Hotels. In addition to that, Misr Hotels is 3.29 times more volatile than Pyramisa Hotels. It trades about 0.03 of its total potential returns per unit of risk. Pyramisa Hotels is currently generating about 0.12 per unit of volatility. If you would invest 4,000 in Pyramisa Hotels on October 24, 2024 and sell it today you would earn a total of 7,913 from holding Pyramisa Hotels or generate 197.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Misr Hotels vs. Pyramisa Hotels
Performance |
| Timeline |
| Misr Hotels |
| Pyramisa Hotels |
Misr Hotels and Pyramisa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Hotels and Pyramisa Hotels
The main advantage of trading using opposite Misr Hotels and Pyramisa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Hotels position performs unexpectedly, Pyramisa Hotels 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 Pyramisa Hotels will offset losses from the drop in Pyramisa Hotels' long position.| Misr Hotels vs. Alexandria New Medical | Misr Hotels vs. Orascom Investment Holding | Misr Hotels vs. ODIN Investments | Misr Hotels vs. National Drilling |
| Pyramisa Hotels vs. ODIN Investments | Pyramisa Hotels vs. Al Khair River | Pyramisa Hotels vs. Egyptian Financial Industrial | Pyramisa Hotels vs. Medical Packaging |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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