Correlation Between El Ahli and Digitize For

Can any of the company-specific risk be diversified away by investing in both El Ahli and Digitize For 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 El Ahli and Digitize For into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between El Ahli Investment and Digitize for Investment, you can compare the effects of market volatilities on El Ahli and Digitize For 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 El Ahli with a short position of Digitize For. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Ahli and Digitize For.

Diversification Opportunities for El Ahli and Digitize For

-0.28

Correlation Coefficient

El Ahli  Digitize For

Very good diversification

The 3 months correlation between AFDI and Digitize is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding El Ahli Investment and Digitize for Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digitize for Investment and El Ahli 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 El Ahli Investment are associated (or correlated) with Digitize For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digitize for Investment has no effect on the direction of El Ahli i.e., El Ahli and Digitize For go up and down completely randomly.

Pair Corralation between El Ahli and Digitize For

Assuming the 90 days trading horizon El Ahli Investment is expected to generate 0.31 times more return on investment than Digitize For. However, El Ahli Investment is 3.2 times less risky than Digitize For. It trades about -0.05 of its potential returns per unit of risk. Digitize for Investment is currently generating about -0.02 per unit of risk. If you would invest  3,011  in El Ahli Investment on October 27, 2024 and sell it today you would lose (59.00) from holding El Ahli Investment or give up 1.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

El Ahli Investment  vs.  Digitize for Investment

El Ahli Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days El Ahli Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Digitize for Investment

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Digitize for Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Digitize For reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with El Ahli and Digitize For

The main advantage of trading using opposite El Ahli and Digitize For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Ahli position performs unexpectedly, Digitize For 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 Digitize For will offset losses from the drop in Digitize For's long position.

The idea behind El Ahli Investment and Digitize for Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.