Correlation Between National Bank and Juhayna Food
Can any of the company-specific risk be diversified away by investing in both National Bank and Juhayna Food 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 National Bank and Juhayna Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank and Juhayna Food Industries, you can compare the effects of market volatilities on National Bank and Juhayna Food 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 National Bank with a short position of Juhayna Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Juhayna Food.
Diversification Opportunities for National Bank and Juhayna Food
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Juhayna is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank and Juhayna Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juhayna Food Industries and National Bank 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 National Bank are associated (or correlated) with Juhayna Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juhayna Food Industries has no effect on the direction of National Bank i.e., National Bank and Juhayna Food go up and down completely randomly.
Pair Corralation between National Bank and Juhayna Food
Assuming the 90 days trading horizon National Bank is expected to under-perform the Juhayna Food. But the stock apears to be less risky and, when comparing its historical volatility, National Bank is 1.92 times less risky than Juhayna Food. The stock trades about -0.06 of its potential returns per unit of risk. The Juhayna Food Industries is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,225 in Juhayna Food Industries on September 2, 2024 and sell it today you would earn a total of 1,976 from holding Juhayna Food Industries or generate 161.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank vs. Juhayna Food Industries
Performance |
| Timeline |
| National Bank |
| Juhayna Food Industries |
National Bank and Juhayna Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Juhayna Food
The main advantage of trading using opposite National Bank and Juhayna Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Juhayna Food 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 Juhayna Food will offset losses from the drop in Juhayna Food's long position.| National Bank vs. Egyptians For Investment | National Bank vs. Misr Oils Soap | National Bank vs. Global Telecom Holding | National Bank vs. Qatar Natl Bank |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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