Correlation Between Misr Oils and Mohandes Insurance
Can any of the company-specific risk be diversified away by investing in both Misr Oils and Mohandes Insurance 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 Mohandes Insurance 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 Mohandes Insurance, you can compare the effects of market volatilities on Misr Oils and Mohandes Insurance 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 Mohandes Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Oils and Mohandes Insurance.
Diversification Opportunities for Misr Oils and Mohandes Insurance
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Misr and Mohandes is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Misr Oils Soap and Mohandes Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mohandes Insurance 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 Mohandes Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mohandes Insurance has no effect on the direction of Misr Oils i.e., Misr Oils and Mohandes Insurance go up and down completely randomly.
Pair Corralation between Misr Oils and Mohandes Insurance
Assuming the 90 days trading horizon Misr Oils is expected to generate 1.32 times less return on investment than Mohandes Insurance. But when comparing it to its historical volatility, Misr Oils Soap is 1.31 times less risky than Mohandes Insurance. It trades about 0.1 of its potential returns per unit of risk. Mohandes Insurance is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,712 in Mohandes Insurance on August 26, 2024 and sell it today you would earn a total of 444.00 from holding Mohandes Insurance or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Oils Soap vs. Mohandes Insurance
Performance |
| Timeline |
| Misr Oils Soap |
| Mohandes Insurance |
Misr Oils and Mohandes Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Oils and Mohandes Insurance
The main advantage of trading using opposite Misr Oils and Mohandes Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Oils position performs unexpectedly, Mohandes Insurance 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 Mohandes Insurance will offset losses from the drop in Mohandes Insurance's long position.| Misr Oils vs. Paint Chemicals Industries | Misr Oils vs. Reacap Financial Investments | Misr Oils vs. Egyptians For Investment | Misr Oils vs. Global Telecom Holding |
| Mohandes Insurance vs. Paint Chemicals Industries | Mohandes Insurance vs. Reacap Financial Investments | Mohandes Insurance vs. Egyptians For Investment | Mohandes Insurance 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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