Correlation Between Misr Chemical and Nozha International
Can any of the company-specific risk be diversified away by investing in both Misr Chemical and Nozha International 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 Nozha International 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 Nozha International Hospital, you can compare the effects of market volatilities on Misr Chemical and Nozha International 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 Nozha International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Chemical and Nozha International.
Diversification Opportunities for Misr Chemical and Nozha International
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Misr and Nozha is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Misr Chemical Industries and Nozha International Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nozha International 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 Nozha International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nozha International has no effect on the direction of Misr Chemical i.e., Misr Chemical and Nozha International go up and down completely randomly.
Pair Corralation between Misr Chemical and Nozha International
Assuming the 90 days trading horizon Misr Chemical Industries is expected to under-perform the Nozha International. In addition to that, Misr Chemical is 1.14 times more volatile than Nozha International Hospital. It trades about -0.24 of its total potential returns per unit of risk. Nozha International Hospital is currently generating about 0.21 per unit of volatility. If you would invest 817.00 in Nozha International Hospital on September 19, 2024 and sell it today you would earn a total of 102.00 from holding Nozha International Hospital or generate 12.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Chemical Industries vs. Nozha International Hospital
Performance |
| Timeline |
| Misr Chemical Industries |
| Nozha International |
Misr Chemical and Nozha International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Chemical and Nozha International
The main advantage of trading using opposite Misr Chemical and Nozha International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Chemical position performs unexpectedly, Nozha International 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 Nozha International will offset losses from the drop in Nozha International'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 |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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