Correlation Between Qatar Natl and Reacap Financial
Can any of the company-specific risk be diversified away by investing in both Qatar Natl and Reacap Financial 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 Reacap Financial 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 Reacap Financial Investments, you can compare the effects of market volatilities on Qatar Natl and Reacap Financial 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 Reacap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qatar Natl and Reacap Financial.
Diversification Opportunities for Qatar Natl and Reacap Financial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qatar and Reacap is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Qatar Natl Bank and Reacap Financial Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reacap Financial Inv 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 Reacap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reacap Financial Inv has no effect on the direction of Qatar Natl i.e., Qatar Natl and Reacap Financial go up and down completely randomly.
Pair Corralation between Qatar Natl and Reacap Financial
Assuming the 90 days trading horizon Qatar Natl Bank is expected to generate 0.66 times more return on investment than Reacap Financial. However, Qatar Natl Bank is 1.52 times less risky than Reacap Financial. It trades about 0.24 of its potential returns per unit of risk. Reacap Financial Investments is currently generating about -0.04 per unit of risk. If you would invest 3,169 in Qatar Natl Bank on August 27, 2024 and sell it today you would earn a total of 281.00 from holding Qatar Natl Bank or generate 8.87% 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. Reacap Financial Investments
Performance |
| Timeline |
| Qatar Natl Bank |
| Reacap Financial Inv |
Qatar Natl and Reacap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qatar Natl and Reacap Financial
The main advantage of trading using opposite Qatar Natl and Reacap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qatar Natl position performs unexpectedly, Reacap Financial 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 Reacap Financial will offset losses from the drop in Reacap Financial's long position.| Qatar Natl vs. Paint Chemicals Industries | Qatar Natl vs. Egyptians For Investment | Qatar Natl vs. Misr Oils Soap | Qatar Natl vs. Global Telecom Holding |
| Reacap Financial vs. Paint Chemicals Industries | Reacap Financial vs. Egyptians For Investment | Reacap Financial vs. Misr Oils Soap | Reacap Financial vs. Global Telecom Holding |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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