Correlation Between El Ahli and Nozha International

Can any of the company-specific risk be diversified away by investing in both El Ahli and Nozha International 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 Nozha International 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 Nozha International Hospital, you can compare the effects of market volatilities on El Ahli and Nozha International 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 Nozha International. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Ahli and Nozha International.

Diversification Opportunities for El Ahli and Nozha International

-0.28

Correlation Coefficient

El Ahli  Nozha International

Very good diversification

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

Pair Corralation between El Ahli and Nozha International

Assuming the 90 days trading horizon El Ahli Investment is expected to under-perform the Nozha International. But the stock apears to be less risky and, when comparing its historical volatility, El Ahli Investment is 2.05 times less risky than Nozha International. The stock trades about -0.26 of its potential returns per unit of risk. The Nozha International Hospital is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  899.00  in Nozha International Hospital on October 20, 2024 and sell it today you would lose (87.00) from holding Nozha International Hospital or give up 9.68% 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.  Nozha International Hospital

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.

Nozha International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nozha International Hospital are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Nozha International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with El Ahli and Nozha International

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

The idea behind El Ahli Investment and Nozha International Hospital 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.