Correlation Between Qatar Natl and El Nasr
Can any of the company-specific risk be diversified away by investing in both Qatar Natl and El Nasr 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 Nasr 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 Nasr Clothes, you can compare the effects of market volatilities on Qatar Natl and El Nasr 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 Nasr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qatar Natl and El Nasr.
Diversification Opportunities for Qatar Natl and El Nasr
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Qatar and KABO is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Qatar Natl Bank and El Nasr Clothes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Nasr Clothes 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 Nasr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Nasr Clothes has no effect on the direction of Qatar Natl i.e., Qatar Natl and El Nasr go up and down completely randomly.
Pair Corralation between Qatar Natl and El Nasr
Assuming the 90 days trading horizon Qatar Natl is expected to generate 1.22 times less return on investment than El Nasr. But when comparing it to its historical volatility, Qatar Natl Bank is 1.55 times less risky than El Nasr. It trades about 0.09 of its potential returns per unit of risk. El Nasr Clothes is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 196.00 in El Nasr Clothes on September 13, 2024 and sell it today you would earn a total of 200.00 from holding El Nasr Clothes or generate 102.04% 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 Nasr Clothes
Performance |
| Timeline |
| Qatar Natl Bank |
| El Nasr Clothes |
Qatar Natl and El Nasr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qatar Natl and El Nasr
The main advantage of trading using opposite Qatar Natl and El Nasr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qatar Natl position performs unexpectedly, El Nasr 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 Nasr will offset losses from the drop in El Nasr's long position.| Qatar Natl vs. Paint Chemicals Industries | Qatar Natl vs. Reacap Financial Investments | Qatar Natl vs. Egyptians For Investment | Qatar Natl vs. Misr Oils Soap |
| El Nasr vs. Egyptian Transport | El Nasr vs. Global Telecom Holding | El Nasr vs. Misr Financial Investments | El Nasr vs. Cairo For Investment |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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