Correlation Between Misr Oils and Al Khair
Can any of the company-specific risk be diversified away by investing in both Misr Oils and Al Khair 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 Al Khair 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 Al Khair River, you can compare the effects of market volatilities on Misr Oils and Al Khair 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 Al Khair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Oils and Al Khair.
Diversification Opportunities for Misr Oils and Al Khair
Good diversification
The 3 months correlation between Misr and KRDI is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Misr Oils Soap and Al Khair River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Khair River 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 Al Khair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Khair River has no effect on the direction of Misr Oils i.e., Misr Oils and Al Khair go up and down completely randomly.
Pair Corralation between Misr Oils and Al Khair
Assuming the 90 days trading horizon Misr Oils Soap is expected to under-perform the Al Khair. But the stock apears to be less risky and, when comparing its historical volatility, Misr Oils Soap is 1.95 times less risky than Al Khair. The stock trades about -0.03 of its potential returns per unit of risk. The Al Khair River is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Al Khair River on October 26, 2024 and sell it today you would earn a total of 4.00 from holding Al Khair River or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Oils Soap vs. Al Khair River
Performance |
| Timeline |
| Misr Oils Soap |
| Al Khair River |
Misr Oils and Al Khair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Oils and Al Khair
The main advantage of trading using opposite Misr Oils and Al Khair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Oils position performs unexpectedly, Al Khair 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 Al Khair will offset losses from the drop in Al Khair's long position.| Misr Oils vs. Commercial International Bank Egypt | Misr Oils vs. Sidi Kerir Petrochemicals | Misr Oils vs. Egyptian Gulf Bank | Misr Oils vs. Misr Chemical Industries |
| Al Khair vs. Paint Chemicals Industries | Al Khair vs. Reacap Financial Investments | Al Khair vs. Egyptians For Investment | Al Khair vs. Misr Oils Soap |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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