Correlation Between Qatar Natl and Egyptian Transport
Can any of the company-specific risk be diversified away by investing in both Qatar Natl and Egyptian Transport 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 Egyptian Transport 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 Egyptian Transport, you can compare the effects of market volatilities on Qatar Natl and Egyptian Transport 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 Egyptian Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qatar Natl and Egyptian Transport.
Diversification Opportunities for Qatar Natl and Egyptian Transport
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qatar and Egyptian is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Qatar Natl Bank and Egyptian Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Transport 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 Egyptian Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Transport has no effect on the direction of Qatar Natl i.e., Qatar Natl and Egyptian Transport go up and down completely randomly.
Pair Corralation between Qatar Natl and Egyptian Transport
Assuming the 90 days trading horizon Qatar Natl is expected to generate 1.7 times less return on investment than Egyptian Transport. But when comparing it to its historical volatility, Qatar Natl Bank is 1.81 times less risky than Egyptian Transport. It trades about 0.07 of its potential returns per unit of risk. Egyptian Transport is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 231.00 in Egyptian Transport on November 30, 2024 and sell it today you would earn a total of 259.00 from holding Egyptian Transport or generate 112.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Qatar Natl Bank vs. Egyptian Transport
Performance |
| Timeline |
| Qatar Natl Bank |
| Egyptian Transport |
Qatar Natl and Egyptian Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qatar Natl and Egyptian Transport
The main advantage of trading using opposite Qatar Natl and Egyptian Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qatar Natl position performs unexpectedly, Egyptian Transport 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 Egyptian Transport will offset losses from the drop in Egyptian Transport's long position.| Qatar Natl vs. Grand Investment Capital | Qatar Natl vs. Lotus For Agricultural | Qatar Natl vs. B Investments Holding | Qatar Natl vs. Misr Financial Investments |
| Egyptian Transport vs. Egyptian Gulf Bank | Egyptian Transport vs. Credit Agricole Egypt | Egyptian Transport vs. Misr Hotels | Egyptian Transport vs. Telecom Egypt |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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