Correlation Between Misr Hotels and Speed Medical
Can any of the company-specific risk be diversified away by investing in both Misr Hotels and Speed Medical 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 Speed Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Hotels and Speed Medical, you can compare the effects of market volatilities on Misr Hotels and Speed Medical 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 Speed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Hotels and Speed Medical.
Diversification Opportunities for Misr Hotels and Speed Medical
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Misr and Speed is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Misr Hotels and Speed Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Speed Medical 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 Speed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Speed Medical has no effect on the direction of Misr Hotels i.e., Misr Hotels and Speed Medical go up and down completely randomly.
Pair Corralation between Misr Hotels and Speed Medical
Assuming the 90 days trading horizon Misr Hotels is expected to generate 6.64 times less return on investment than Speed Medical. But when comparing it to its historical volatility, Misr Hotels is 1.92 times less risky than Speed Medical. It trades about 0.06 of its potential returns per unit of risk. Speed Medical is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Speed Medical on November 4, 2024 and sell it today you would earn a total of 5.00 from holding Speed Medical or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Hotels vs. Speed Medical
Performance |
| Timeline |
| Misr Hotels |
| Speed Medical |
Misr Hotels and Speed Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Hotels and Speed Medical
The main advantage of trading using opposite Misr Hotels and Speed Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Hotels position performs unexpectedly, Speed Medical 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 Speed Medical will offset losses from the drop in Speed Medical'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 |
| Speed Medical vs. Al Arafa Investment | Speed Medical vs. Odin for Investment | Speed Medical vs. Egyptians For Investment | Speed Medical vs. El Ahli 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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