Correlation Between Anghami Warrants and WPP PLC

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

By analyzing existing cross correlation between Anghami Warrants and WPP PLC ADR, you can compare the effects of market volatilities on Anghami Warrants and WPP PLC 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 WPP PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anghami Warrants and WPP PLC.

Diversification Opportunities for Anghami Warrants and WPP PLC

0.55

Correlation Coefficient

Anghami Warrants  WPP PLC

Very weak diversification

The 3 months correlation between Anghami and WPP is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Anghami Warrants and WPP PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPP PLC ADR 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 WPP PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPP PLC ADR has no effect on the direction of Anghami Warrants i.e., Anghami Warrants and WPP PLC go up and down completely randomly.

Pair Corralation between Anghami Warrants and WPP PLC

Assuming the 90 days horizon Anghami Warrants is expected to generate 5.35 times more return on investment than WPP PLC. However, Anghami Warrants is 5.35 times more volatile than WPP PLC ADR. It trades about 0.02 of its potential returns per unit of risk. WPP PLC ADR is currently generating about -0.17 per unit of risk. If you would invest  1.79  in Anghami Warrants on December 28, 2024 and sell it today you would lose (0.49) from holding Anghami Warrants or give up 27.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	83.33%
Values	Daily Returns

Anghami Warrants  vs.  WPP PLC ADR

Anghami Warrants

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anghami Warrants are ranked lower than 1 (%) 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.

WPP PLC ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days WPP PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Anghami Warrants and WPP PLC

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

The idea behind Anghami Warrants and WPP PLC ADR 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.