Correlation Between Misr Oils and El Nasr
Can any of the company-specific risk be diversified away by investing in both Misr Oils and El Nasr 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 El Nasr 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 El Nasr Clothes, you can compare the effects of market volatilities on Misr Oils and El Nasr 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 El Nasr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Oils and El Nasr.
Diversification Opportunities for Misr Oils and El Nasr
Very weak diversification
The 3 months correlation between Misr and KABO is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Misr Oils Soap and El Nasr Clothes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Nasr Clothes 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 El Nasr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Nasr Clothes has no effect on the direction of Misr Oils i.e., Misr Oils and El Nasr go up and down completely randomly.
Pair Corralation between Misr Oils and El Nasr
Assuming the 90 days trading horizon Misr Oils Soap is expected to generate 0.77 times more return on investment than El Nasr. However, Misr Oils Soap is 1.31 times less risky than El Nasr. It trades about 0.09 of its potential returns per unit of risk. El Nasr Clothes is currently generating about 0.07 per unit of risk. If you would invest 2,672 in Misr Oils Soap on September 13, 2024 and sell it today you would earn a total of 3,342 from holding Misr Oils Soap or generate 125.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Oils Soap vs. El Nasr Clothes
Performance |
| Timeline |
| Misr Oils Soap |
| El Nasr Clothes |
Misr Oils and El Nasr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Oils and El Nasr
The main advantage of trading using opposite Misr Oils and El Nasr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Oils position performs unexpectedly, El Nasr 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 El Nasr will offset losses from the drop in El Nasr's long position.| Misr Oils vs. Paint Chemicals Industries | Misr Oils vs. Reacap Financial Investments | Misr Oils vs. Egyptians For Investment | Misr Oils vs. Ismailia Development and |
| El Nasr vs. Egyptian Transport | El Nasr vs. Global Telecom Holding | El Nasr vs. Misr Financial Investments | El Nasr vs. Cairo For Investment |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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