Correlation Between Qatar Natl and Al Khair
Can any of the company-specific risk be diversified away by investing in both Qatar Natl and Al Khair 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 Al Khair 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 Al Khair River, you can compare the effects of market volatilities on Qatar Natl and Al Khair 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 Al Khair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qatar Natl and Al Khair.
Diversification Opportunities for Qatar Natl and Al Khair
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Qatar and KRDI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Qatar Natl Bank and Al Khair River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Khair River 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 Al Khair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Khair River has no effect on the direction of Qatar Natl i.e., Qatar Natl and Al Khair go up and down completely randomly.
Pair Corralation between Qatar Natl and Al Khair
Assuming the 90 days trading horizon Qatar Natl Bank is expected to generate 0.72 times more return on investment than Al Khair. However, Qatar Natl Bank is 1.39 times less risky than Al Khair. It trades about 0.22 of its potential returns per unit of risk. Al Khair River is currently generating about 0.01 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qatar Natl Bank vs. Al Khair River
Performance |
| Timeline |
| Qatar Natl Bank |
| Al Khair River |
Qatar Natl and Al Khair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qatar Natl and Al Khair
The main advantage of trading using opposite Qatar Natl and Al Khair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qatar Natl position performs unexpectedly, Al Khair 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 Khair will offset losses from the drop in Al Khair'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 |
| Al Khair vs. Egyptians For Investment | Al Khair vs. Misr Oils Soap | Al Khair vs. Global Telecom Holding | Al Khair 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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