Correlation Between Misr Oils and Act Financial
Can any of the company-specific risk be diversified away by investing in both Misr Oils and Act Financial 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 Oils and Act Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Oils Soap and Act Financial, you can compare the effects of market volatilities on Misr Oils and Act Financial 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 Oils with a short position of Act Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Oils and Act Financial.
Diversification Opportunities for Misr Oils and Act Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Misr and Act is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Misr Oils Soap and Act Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Act Financial and Misr Oils 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 Oils Soap are associated (or correlated) with Act Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Act Financial has no effect on the direction of Misr Oils i.e., Misr Oils and Act Financial go up and down completely randomly.
Pair Corralation between Misr Oils and Act Financial
Assuming the 90 days trading horizon Misr Oils Soap is expected to generate 0.59 times more return on investment than Act Financial. However, Misr Oils Soap is 1.69 times less risky than Act Financial. It trades about 0.1 of its potential returns per unit of risk. Act Financial is currently generating about -0.02 per unit of risk. If you would invest 5,010 in Misr Oils Soap on August 28, 2024 and sell it today you would earn a total of 987.00 from holding Misr Oils Soap or generate 19.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.1% |
| Values | Daily Returns |
Misr Oils Soap vs. Act Financial
Performance |
| Timeline |
| Misr Oils Soap |
| Act Financial |
Misr Oils and Act Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Oils and Act Financial
The main advantage of trading using opposite Misr Oils and Act Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Oils position performs unexpectedly, Act Financial 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 Act Financial will offset losses from the drop in Act Financial's long position.| Misr Oils vs. Ismailia National Food | Misr Oils vs. Misr National Steel | Misr Oils vs. Misr Hotels | Misr Oils vs. Dice Sport Casual |
| Act Financial vs. Paint Chemicals Industries | Act Financial vs. Egyptians For Investment | Act Financial vs. Misr Oils Soap | Act Financial 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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