Correlation Between Saudi Egyptian and Golden Textiles
Can any of the company-specific risk be diversified away by investing in both Saudi Egyptian and Golden Textiles 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 Saudi Egyptian and Golden Textiles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saudi Egyptian Investment and Golden Textiles Clothes, you can compare the effects of market volatilities on Saudi Egyptian and Golden Textiles 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 Saudi Egyptian with a short position of Golden Textiles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saudi Egyptian and Golden Textiles.
Diversification Opportunities for Saudi Egyptian and Golden Textiles
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Saudi and Golden is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Saudi Egyptian Investment and Golden Textiles Clothes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Textiles Clothes and Saudi Egyptian 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 Saudi Egyptian Investment are associated (or correlated) with Golden Textiles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Textiles Clothes has no effect on the direction of Saudi Egyptian i.e., Saudi Egyptian and Golden Textiles go up and down completely randomly.
Pair Corralation between Saudi Egyptian and Golden Textiles
Assuming the 90 days trading horizon Saudi Egyptian is expected to generate 5.32 times less return on investment than Golden Textiles. But when comparing it to its historical volatility, Saudi Egyptian Investment is 1.31 times less risky than Golden Textiles. It trades about 0.03 of its potential returns per unit of risk. Golden Textiles Clothes is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 700.00 in Golden Textiles Clothes on September 19, 2024 and sell it today you would earn a total of 1,944 from holding Golden Textiles Clothes or generate 277.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saudi Egyptian Investment vs. Golden Textiles Clothes
Performance |
| Timeline |
| Saudi Egyptian Investment |
| Golden Textiles Clothes |
Saudi Egyptian and Golden Textiles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saudi Egyptian and Golden Textiles
The main advantage of trading using opposite Saudi Egyptian and Golden Textiles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saudi Egyptian position performs unexpectedly, Golden Textiles 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 Golden Textiles will offset losses from the drop in Golden Textiles' long position.| Saudi Egyptian vs. Paint Chemicals Industries | Saudi Egyptian vs. Reacap Financial Investments | Saudi Egyptian vs. Egyptians For Investment | Saudi Egyptian vs. Misr Oils Soap |
| Golden Textiles vs. Paint Chemicals Industries | Golden Textiles vs. Reacap Financial Investments | Golden Textiles vs. Egyptians For Investment | Golden Textiles 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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