Correlation Between Elsaeed Contracting and Al Baraka
Can any of the company-specific risk be diversified away by investing in both Elsaeed Contracting and Al Baraka 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 Elsaeed Contracting and Al Baraka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elsaeed Contracting Real and Al Baraka Bank, you can compare the effects of market volatilities on Elsaeed Contracting and Al Baraka 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 Elsaeed Contracting with a short position of Al Baraka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elsaeed Contracting and Al Baraka.
Diversification Opportunities for Elsaeed Contracting and Al Baraka
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elsaeed and SAUD is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Elsaeed Contracting Real and Al Baraka Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Baraka Bank and Elsaeed Contracting 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 Elsaeed Contracting Real are associated (or correlated) with Al Baraka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Baraka Bank has no effect on the direction of Elsaeed Contracting i.e., Elsaeed Contracting and Al Baraka go up and down completely randomly.
Pair Corralation between Elsaeed Contracting and Al Baraka
Assuming the 90 days trading horizon Elsaeed Contracting is expected to generate 1.03 times less return on investment than Al Baraka. In addition to that, Elsaeed Contracting is 1.08 times more volatile than Al Baraka Bank. It trades about 0.07 of its total potential returns per unit of risk. Al Baraka Bank is currently generating about 0.08 per unit of volatility. If you would invest 831.00 in Al Baraka Bank on September 12, 2024 and sell it today you would earn a total of 525.00 from holding Al Baraka Bank or generate 63.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elsaeed Contracting Real vs. Al Baraka Bank
Performance |
| Timeline |
| Elsaeed Contracting Real |
| Al Baraka Bank |
Elsaeed Contracting and Al Baraka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elsaeed Contracting and Al Baraka
The main advantage of trading using opposite Elsaeed Contracting and Al Baraka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elsaeed Contracting position performs unexpectedly, Al Baraka 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 Baraka will offset losses from the drop in Al Baraka's long position.| Elsaeed Contracting vs. Arab Moltaka Investments | Elsaeed Contracting vs. Egyptians For Investment | Elsaeed Contracting vs. ODIN Investments | Elsaeed Contracting vs. Global Telecom Holding |
| Al Baraka vs. Paint Chemicals Industries | Al Baraka vs. Reacap Financial Investments | Al Baraka vs. Egyptians For Investment | Al Baraka 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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