Correlation Between Qatar Natl and Cairo For
Can any of the company-specific risk be diversified away by investing in both Qatar Natl and Cairo For 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 Cairo For 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 Cairo For Investment, you can compare the effects of market volatilities on Qatar Natl and Cairo For 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 Cairo For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qatar Natl and Cairo For.
Diversification Opportunities for Qatar Natl and Cairo For
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qatar and Cairo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Qatar Natl Bank and Cairo For Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo For 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 Cairo For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo For Investment has no effect on the direction of Qatar Natl i.e., Qatar Natl and Cairo For go up and down completely randomly.
Pair Corralation between Qatar Natl and Cairo For
Assuming the 90 days trading horizon Qatar Natl Bank is expected to generate 2.42 times more return on investment than Cairo For. However, Qatar Natl is 2.42 times more volatile than Cairo For Investment. It trades about 0.22 of its potential returns per unit of risk. Cairo For Investment is currently generating about -0.19 per unit of risk. If you would invest 3,228 in Qatar Natl Bank on September 2, 2024 and sell it today you would earn a total of 242.00 from holding Qatar Natl Bank or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qatar Natl Bank vs. Cairo For Investment
Performance |
| Timeline |
| Qatar Natl Bank |
| Cairo For Investment |
Qatar Natl and Cairo For Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qatar Natl and Cairo For
The main advantage of trading using opposite Qatar Natl and Cairo For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qatar Natl position performs unexpectedly, Cairo For 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 Cairo For will offset losses from the drop in Cairo For's long position.| Qatar Natl vs. Egyptians For Investment | Qatar Natl vs. Misr Oils Soap | Qatar Natl vs. Global Telecom Holding | Qatar Natl vs. Orascom Construction PLC |
| Cairo For vs. Egyptians For Investment | Cairo For vs. Misr Oils Soap | Cairo For vs. Global Telecom Holding | Cairo For vs. Qatar Natl Bank |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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