Correlation Between Al Baraka and Juhayna Food
Can any of the company-specific risk be diversified away by investing in both Al Baraka and Juhayna Food 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 Al Baraka and Juhayna Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Baraka Bank and Juhayna Food Industries, you can compare the effects of market volatilities on Al Baraka and Juhayna Food 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 Al Baraka with a short position of Juhayna Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Baraka and Juhayna Food.
Diversification Opportunities for Al Baraka and Juhayna Food
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SAUD and Juhayna is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Al Baraka Bank and Juhayna Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juhayna Food Industries and Al Baraka 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 Al Baraka Bank are associated (or correlated) with Juhayna Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juhayna Food Industries has no effect on the direction of Al Baraka i.e., Al Baraka and Juhayna Food go up and down completely randomly.
Pair Corralation between Al Baraka and Juhayna Food
Assuming the 90 days trading horizon Al Baraka is expected to generate 2.65 times less return on investment than Juhayna Food. But when comparing it to its historical volatility, Al Baraka Bank is 2.37 times less risky than Juhayna Food. It trades about 0.15 of its potential returns per unit of risk. Juhayna Food Industries is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,694 in Juhayna Food Industries on September 5, 2024 and sell it today you would earn a total of 1,556 from holding Juhayna Food Industries or generate 91.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Baraka Bank vs. Juhayna Food Industries
Performance |
| Timeline |
| Al Baraka Bank |
| Juhayna Food Industries |
Al Baraka and Juhayna Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Baraka and Juhayna Food
The main advantage of trading using opposite Al Baraka and Juhayna Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Baraka position performs unexpectedly, Juhayna Food 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 Juhayna Food will offset losses from the drop in Juhayna Food's long position.| Al Baraka vs. Paint Chemicals Industries | Al Baraka vs. Egyptians For Investment | Al Baraka vs. Misr Oils Soap | Al Baraka vs. Global Telecom Holding |
| Juhayna Food vs. Paint Chemicals Industries | Juhayna Food vs. Egyptians For Investment | Juhayna Food vs. Misr Oils Soap | Juhayna Food 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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