Correlation Between Reacap Financial and Qatar Natl
Can any of the company-specific risk be diversified away by investing in both Reacap Financial and Qatar Natl 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 Qatar Natl 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 Qatar Natl Bank, you can compare the effects of market volatilities on Reacap Financial and Qatar Natl 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 Qatar Natl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reacap Financial and Qatar Natl.
Diversification Opportunities for Reacap Financial and Qatar Natl
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Reacap and Qatar is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Reacap Financial Investments and Qatar Natl Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qatar Natl Bank 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 Qatar Natl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qatar Natl Bank has no effect on the direction of Reacap Financial i.e., Reacap Financial and Qatar Natl go up and down completely randomly.
Pair Corralation between Reacap Financial and Qatar Natl
Assuming the 90 days trading horizon Reacap Financial Investments is expected to generate 1.97 times more return on investment than Qatar Natl. However, Reacap Financial is 1.97 times more volatile than Qatar Natl Bank. It trades about -0.08 of its potential returns per unit of risk. Qatar Natl Bank is currently generating about -0.73 per unit of risk. If you would invest 654.00 in Reacap Financial Investments on November 5, 2024 and sell it today you would lose (14.00) from holding Reacap Financial Investments or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reacap Financial Investments vs. Qatar Natl Bank
Performance |
| Timeline |
| Reacap Financial Inv |
| Qatar Natl Bank |
Reacap Financial and Qatar Natl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reacap Financial and Qatar Natl
The main advantage of trading using opposite Reacap Financial and Qatar Natl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reacap Financial position performs unexpectedly, Qatar Natl 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 Qatar Natl will offset losses from the drop in Qatar Natl's long position.| Reacap Financial vs. Pyramisa Hotels | Reacap Financial vs. Misr Hotels | Reacap Financial vs. Credit Agricole Egypt | Reacap Financial vs. Misr Financial Investments |
| Qatar Natl vs. Mohandes Insurance | Qatar Natl vs. Credit Agricole Egypt | Qatar Natl vs. Edita Food Industries | Qatar Natl vs. Faisal Islamic 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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