Correlation Between Anghami Warrants and National CineMedia

Can any of the company-specific risk be diversified away by investing in both Anghami Warrants and National CineMedia 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 Anghami Warrants and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anghami Warrants and National CineMedia, you can compare the effects of market volatilities on Anghami Warrants and National CineMedia 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 Anghami Warrants with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anghami Warrants and National CineMedia.

Diversification Opportunities for Anghami Warrants and National CineMedia

0.25

Correlation Coefficient

Anghami Warrants  National CineMedia

Modest diversification

The 3 months correlation between Anghami and National is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Anghami Warrants and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Anghami Warrants 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 Anghami Warrants are associated (or correlated) with National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Anghami Warrants i.e., Anghami Warrants and National CineMedia go up and down completely randomly.

Pair Corralation between Anghami Warrants and National CineMedia

Assuming the 90 days horizon Anghami Warrants is expected to generate 10.49 times more return on investment than National CineMedia. However, Anghami Warrants is 10.49 times more volatile than National CineMedia. It trades about 0.02 of its potential returns per unit of risk. National CineMedia is currently generating about -0.06 per unit of risk. If you would invest  3.88  in Anghami Warrants on October 6, 2024 and sell it today you would lose (1.98) from holding Anghami Warrants or give up 51.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	70.73%
Values	Daily Returns

Anghami Warrants  vs.  National CineMedia

Anghami Warrants

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anghami Warrants are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical indicators, Anghami Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

National CineMedia

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National CineMedia are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong primary indicators, National CineMedia is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Anghami Warrants and National CineMedia

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

The idea behind Anghami Warrants and National CineMedia 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.