Correlation Between Nozha International and Al Tawfeek
Can any of the company-specific risk be diversified away by investing in both Nozha International and Al Tawfeek 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 Al Tawfeek 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 Al Tawfeek Leasing, you can compare the effects of market volatilities on Nozha International and Al Tawfeek 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 Al Tawfeek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nozha International and Al Tawfeek.
Diversification Opportunities for Nozha International and Al Tawfeek
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nozha and ATLC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nozha International Hospital and Al Tawfeek Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Tawfeek Leasing 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 Al Tawfeek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Tawfeek Leasing has no effect on the direction of Nozha International i.e., Nozha International and Al Tawfeek go up and down completely randomly.
Pair Corralation between Nozha International and Al Tawfeek
Assuming the 90 days trading horizon Nozha International Hospital is expected to generate 1.54 times more return on investment than Al Tawfeek. However, Nozha International is 1.54 times more volatile than Al Tawfeek Leasing. It trades about 0.17 of its potential returns per unit of risk. Al Tawfeek Leasing is currently generating about 0.09 per unit of risk. If you would invest 651.00 in Nozha International Hospital on August 28, 2024 and sell it today you would earn a total of 213.00 from holding Nozha International Hospital or generate 32.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.08% |
| Values | Daily Returns |
Nozha International Hospital vs. Al Tawfeek Leasing
Performance |
| Timeline |
| Nozha International |
| Al Tawfeek Leasing |
Nozha International and Al Tawfeek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nozha International and Al Tawfeek
The main advantage of trading using opposite Nozha International and Al Tawfeek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nozha International position performs unexpectedly, Al Tawfeek 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 Tawfeek will offset losses from the drop in Al Tawfeek's long position.| Nozha International vs. Paint Chemicals Industries | Nozha International vs. Egyptians For Investment | Nozha International vs. Misr Oils Soap | Nozha International vs. Global Telecom Holding |
| Al Tawfeek vs. Paint Chemicals Industries | Al Tawfeek vs. Egyptians For Investment | Al Tawfeek vs. Misr Oils Soap | Al Tawfeek vs. Global Telecom Holding |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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