Correlation Between Misr Chemical and Mohandes Insurance
Can any of the company-specific risk be diversified away by investing in both Misr Chemical and Mohandes Insurance 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 Mohandes Insurance 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 Mohandes Insurance, you can compare the effects of market volatilities on Misr Chemical and Mohandes Insurance 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 Mohandes Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Chemical and Mohandes Insurance.
Diversification Opportunities for Misr Chemical and Mohandes Insurance
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Misr and Mohandes is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Misr Chemical Industries and Mohandes Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mohandes Insurance 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 Mohandes Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mohandes Insurance has no effect on the direction of Misr Chemical i.e., Misr Chemical and Mohandes Insurance go up and down completely randomly.
Pair Corralation between Misr Chemical and Mohandes Insurance
Assuming the 90 days trading horizon Misr Chemical Industries is expected to under-perform the Mohandes Insurance. In addition to that, Misr Chemical is 1.26 times more volatile than Mohandes Insurance. It trades about -0.31 of its total potential returns per unit of risk. Mohandes Insurance is currently generating about 0.26 per unit of volatility. If you would invest 1,908 in Mohandes Insurance on August 30, 2024 and sell it today you would earn a total of 248.00 from holding Mohandes Insurance or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Misr Chemical Industries vs. Mohandes Insurance
Performance |
| Timeline |
| Misr Chemical Industries |
| Mohandes Insurance |
Misr Chemical and Mohandes Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Chemical and Mohandes Insurance
The main advantage of trading using opposite Misr Chemical and Mohandes Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Chemical position performs unexpectedly, Mohandes Insurance 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 Mohandes Insurance will offset losses from the drop in Mohandes Insurance's long position.| Misr Chemical vs. Paint Chemicals Industries | Misr Chemical vs. Egyptians For Investment | Misr Chemical vs. Misr Oils Soap | Misr Chemical vs. Global Telecom Holding |
| Mohandes Insurance vs. Golden Textiles Clothes | Mohandes Insurance vs. Cairo Oils Soap | Mohandes Insurance vs. AJWA for Food | Mohandes Insurance vs. Juhayna Food Industries |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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