Correlation Between Mohandes Insurance and Misr National
Can any of the company-specific risk be diversified away by investing in both Mohandes Insurance and Misr National 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 Mohandes Insurance and Misr National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mohandes Insurance and Misr National Steel, you can compare the effects of market volatilities on Mohandes Insurance and Misr National 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 Mohandes Insurance with a short position of Misr National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mohandes Insurance and Misr National.
Diversification Opportunities for Mohandes Insurance and Misr National
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mohandes and Misr is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mohandes Insurance and Misr National Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr National Steel and Mohandes Insurance 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 Mohandes Insurance are associated (or correlated) with Misr National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr National Steel has no effect on the direction of Mohandes Insurance i.e., Mohandes Insurance and Misr National go up and down completely randomly.
Pair Corralation between Mohandes Insurance and Misr National
Assuming the 90 days trading horizon Mohandes Insurance is expected to generate 1.24 times more return on investment than Misr National. However, Mohandes Insurance is 1.24 times more volatile than Misr National Steel. It trades about 0.26 of its potential returns per unit of risk. Misr National Steel is currently generating about -0.01 per unit of risk. 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 | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Mohandes Insurance vs. Misr National Steel
Performance |
| Timeline |
| Mohandes Insurance |
| Misr National Steel |
Mohandes Insurance and Misr National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mohandes Insurance and Misr National
The main advantage of trading using opposite Mohandes Insurance and Misr National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mohandes Insurance position performs unexpectedly, Misr National 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 Misr National will offset losses from the drop in Misr National's long position.| Mohandes Insurance vs. Golden Textiles Clothes | Mohandes Insurance vs. Cairo Oils Soap | Mohandes Insurance vs. AJWA for Food | Mohandes Insurance vs. Juhayna Food Industries |
| Misr National vs. Paint Chemicals Industries | Misr National vs. Egyptians For Investment | Misr National vs. Misr Oils Soap | Misr National vs. Global Telecom Holding |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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