Correlation Between Misr Oils and Faisal Islamic
Can any of the company-specific risk be diversified away by investing in both Misr Oils and Faisal Islamic 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 Faisal Islamic 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 Faisal Islamic Bank, you can compare the effects of market volatilities on Misr Oils and Faisal Islamic 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 Faisal Islamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Oils and Faisal Islamic.
Diversification Opportunities for Misr Oils and Faisal Islamic
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Misr and Faisal is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Misr Oils Soap and Faisal Islamic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faisal Islamic Bank 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 Faisal Islamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faisal Islamic Bank has no effect on the direction of Misr Oils i.e., Misr Oils and Faisal Islamic go up and down completely randomly.
Pair Corralation between Misr Oils and Faisal Islamic
Assuming the 90 days trading horizon Misr Oils is expected to generate 5.23 times less return on investment than Faisal Islamic. But when comparing it to its historical volatility, Misr Oils Soap is 3.41 times less risky than Faisal Islamic. It trades about 0.14 of its potential returns per unit of risk. Faisal Islamic Bank is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,300 in Faisal Islamic Bank on September 2, 2024 and sell it today you would earn a total of 607.00 from holding Faisal Islamic Bank or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Oils Soap vs. Faisal Islamic Bank
Performance |
| Timeline |
| Misr Oils Soap |
| Faisal Islamic Bank |
Misr Oils and Faisal Islamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Oils and Faisal Islamic
The main advantage of trading using opposite Misr Oils and Faisal Islamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Oils position performs unexpectedly, Faisal Islamic 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 Faisal Islamic will offset losses from the drop in Faisal Islamic's long position.| Misr Oils vs. Egyptians For Investment | Misr Oils vs. Global Telecom Holding | Misr Oils vs. Qatar Natl Bank | Misr Oils vs. Orascom Construction PLC |
| Faisal Islamic vs. Egyptians For Investment | Faisal Islamic vs. Misr Oils Soap | Faisal Islamic vs. Global Telecom Holding | Faisal Islamic vs. Qatar Natl Bank |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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