Correlation Between Qatar Natl and El Ahli
Can any of the company-specific risk be diversified away by investing in both Qatar Natl and El Ahli 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 Qatar Natl and El Ahli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qatar Natl Bank and El Ahli Investment, you can compare the effects of market volatilities on Qatar Natl and El Ahli 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 Qatar Natl with a short position of El Ahli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qatar Natl and El Ahli.
Diversification Opportunities for Qatar Natl and El Ahli
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Qatar and AFDI is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Qatar Natl Bank and El Ahli Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Ahli Investment and Qatar Natl 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 Qatar Natl Bank are associated (or correlated) with El Ahli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Ahli Investment has no effect on the direction of Qatar Natl i.e., Qatar Natl and El Ahli go up and down completely randomly.
Pair Corralation between Qatar Natl and El Ahli
Assuming the 90 days trading horizon Qatar Natl is expected to generate 1.2 times less return on investment than El Ahli. But when comparing it to its historical volatility, Qatar Natl Bank is 2.11 times less risky than El Ahli. It trades about 0.09 of its potential returns per unit of risk. El Ahli Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,852 in El Ahli Investment on September 2, 2024 and sell it today you would earn a total of 1,271 from holding El Ahli Investment or generate 68.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qatar Natl Bank vs. El Ahli Investment
Performance |
| Timeline |
| Qatar Natl Bank |
| El Ahli Investment |
Qatar Natl and El Ahli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qatar Natl and El Ahli
The main advantage of trading using opposite Qatar Natl and El Ahli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qatar Natl position performs unexpectedly, El Ahli 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 El Ahli will offset losses from the drop in El Ahli's long position.| Qatar Natl vs. Egyptians For Investment | Qatar Natl vs. Misr Oils Soap | Qatar Natl vs. Orascom Construction PLC | Qatar Natl vs. Orascom Investment Holding |
| El Ahli vs. Egyptians For Investment | El Ahli vs. Misr Oils Soap | El Ahli vs. Qatar Natl Bank | El Ahli vs. Orascom Construction PLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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