Correlation Between Reacap Financial and Al Khair
Can any of the company-specific risk be diversified away by investing in both Reacap Financial 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 Reacap Financial and Al Khair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reacap Financial Investments and Al Khair River, you can compare the effects of market volatilities on Reacap Financial 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 Reacap Financial with a short position of Al Khair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reacap Financial and Al Khair.
Diversification Opportunities for Reacap Financial and Al Khair
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Reacap and KRDI is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Reacap Financial Investments 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 Reacap Financial 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 Reacap Financial Investments 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 Reacap Financial i.e., Reacap Financial and Al Khair go up and down completely randomly.
Pair Corralation between Reacap Financial and Al Khair
Assuming the 90 days trading horizon Reacap Financial Investments is expected to under-perform the Al Khair. But the stock apears to be less risky and, when comparing its historical volatility, Reacap Financial Investments is 1.7 times less risky than Al Khair. The stock trades about -0.05 of its potential returns per unit of risk. The Al Khair River is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Al Khair River on October 26, 2024 and sell it today you would earn a total of 4.00 from holding Al Khair River or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reacap Financial Investments vs. Al Khair River
Performance |
| Timeline |
| Reacap Financial Inv |
| Al Khair River |
Reacap Financial and Al Khair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reacap Financial and Al Khair
The main advantage of trading using opposite Reacap Financial and Al Khair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reacap Financial 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.| Reacap Financial vs. Alexandria New Medical | Reacap Financial vs. Egyptian Transport | Reacap Financial vs. Inter Cairo For Aluminum | Reacap Financial vs. Delta Insurance |
| Al Khair vs. Paint Chemicals Industries | Al Khair vs. Reacap Financial Investments | Al Khair vs. Egyptians For Investment | Al Khair vs. Misr Oils Soap |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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