Correlation Between Nozha International and Alexandria New
Can any of the company-specific risk be diversified away by investing in both Nozha International and Alexandria New 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 Nozha International and Alexandria New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nozha International Hospital and Alexandria New Medical, you can compare the effects of market volatilities on Nozha International and Alexandria New 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 Nozha International with a short position of Alexandria New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nozha International and Alexandria New.
Diversification Opportunities for Nozha International and Alexandria New
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nozha and Alexandria is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nozha International Hospital and Alexandria New Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria New Medical and Nozha International 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 Nozha International Hospital are associated (or correlated) with Alexandria New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria New Medical has no effect on the direction of Nozha International i.e., Nozha International and Alexandria New go up and down completely randomly.
Pair Corralation between Nozha International and Alexandria New
Assuming the 90 days trading horizon Nozha International Hospital is expected to under-perform the Alexandria New. In addition to that, Nozha International is 1.4 times more volatile than Alexandria New Medical. It trades about -0.16 of its total potential returns per unit of risk. Alexandria New Medical is currently generating about -0.12 per unit of volatility. If you would invest 1,893 in Alexandria New Medical on November 4, 2024 and sell it today you would lose (65.00) from holding Alexandria New Medical or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nozha International Hospital vs. Alexandria New Medical
Performance |
| Timeline |
| Nozha International |
| Alexandria New Medical |
Nozha International and Alexandria New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nozha International and Alexandria New
The main advantage of trading using opposite Nozha International and Alexandria New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nozha International position performs unexpectedly, Alexandria New 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 Alexandria New will offset losses from the drop in Alexandria New's long position.| Nozha International vs. Golden Textiles Clothes | Nozha International vs. Orascom Construction PLC | Nozha International vs. Taaleem Management Services | Nozha International vs. Telecom Egypt |
| Alexandria New vs. Paint Chemicals Industries | Alexandria New vs. Reacap Financial Investments | Alexandria New vs. Egyptians For Investment | Alexandria New 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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