Correlation Between Misr Chemical and Juhayna Food
Can any of the company-specific risk be diversified away by investing in both Misr Chemical and Juhayna Food 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 Chemical and Juhayna Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Chemical Industries and Juhayna Food Industries, you can compare the effects of market volatilities on Misr Chemical and Juhayna Food 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 Chemical with a short position of Juhayna Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Chemical and Juhayna Food.
Diversification Opportunities for Misr Chemical and Juhayna Food
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Misr and Juhayna is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Misr Chemical Industries and Juhayna Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juhayna Food Industries and Misr Chemical 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 Chemical Industries are associated (or correlated) with Juhayna Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juhayna Food Industries has no effect on the direction of Misr Chemical i.e., Misr Chemical and Juhayna Food go up and down completely randomly.
Pair Corralation between Misr Chemical and Juhayna Food
Assuming the 90 days trading horizon Misr Chemical Industries is expected to under-perform the Juhayna Food. In addition to that, Misr Chemical is 1.84 times more volatile than Juhayna Food Industries. It trades about -0.24 of its total potential returns per unit of risk. Juhayna Food Industries is currently generating about -0.39 per unit of volatility. If you would invest 3,460 in Juhayna Food Industries on September 19, 2024 and sell it today you would lose (488.00) from holding Juhayna Food Industries or give up 14.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Chemical Industries vs. Juhayna Food Industries
Performance |
| Timeline |
| Misr Chemical Industries |
| Juhayna Food Industries |
Misr Chemical and Juhayna Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Chemical and Juhayna Food
The main advantage of trading using opposite Misr Chemical and Juhayna Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Chemical position performs unexpectedly, Juhayna Food 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 Juhayna Food will offset losses from the drop in Juhayna Food's long position.| Misr Chemical vs. Egyptian Transport | Misr Chemical vs. Atlas For Investment | Misr Chemical vs. Al Tawfeek Leasing | Misr Chemical vs. Orascom Investment Holding |
| Juhayna Food vs. Paint Chemicals Industries | Juhayna Food vs. Reacap Financial Investments | Juhayna Food vs. Egyptians For Investment | Juhayna Food vs. Misr Oils Soap |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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