Correlation Between Al Arafa and Mohandes Insurance

Can any of the company-specific risk be diversified away by investing in both Al Arafa and Mohandes Insurance 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 Arafa and Mohandes Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Al Arafa Investment and Mohandes Insurance, you can compare the effects of market volatilities on Al Arafa and Mohandes Insurance 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 Arafa with a short position of Mohandes Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Arafa and Mohandes Insurance.

Diversification Opportunities for Al Arafa and Mohandes Insurance

0.0

Correlation Coefficient

Al Arafa  Mohandes Insurance

Pay attention - limited upside

The 3 months correlation between AIVCB and Mohandes is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Al Arafa Investment and Mohandes Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mohandes Insurance and Al Arafa 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 Arafa Investment are associated (or correlated) with Mohandes Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mohandes Insurance has no effect on the direction of Al Arafa i.e., Al Arafa and Mohandes Insurance go up and down completely randomly.

Pair Corralation between Al Arafa and Mohandes Insurance

If you would invest  2,411  in Mohandes Insurance on December 25, 2024 and sell it today you would earn a total of  86.00  from holding Mohandes Insurance or generate 3.57% return on investment over 90 days.

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

Al Arafa Investment  vs.  Mohandes Insurance

Al Arafa Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Al Arafa Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Al Arafa is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Mohandes Insurance

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mohandes Insurance are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Mohandes Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Al Arafa and Mohandes Insurance

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

The idea behind Al Arafa Investment and Mohandes Insurance 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.