Correlation Between Misr National and National Bank

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

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

Diversification Opportunities for Misr National and National Bank

0.0

Correlation Coefficient

Misr National  National Bank

Pay attention - limited upside

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

Pair Corralation between Misr National and National Bank

If you would invest  508.00  in Misr National Steel on December 30, 2024 and sell it today you would earn a total of  446.00  from holding Misr National Steel or generate 87.8% return on investment over 90 days.

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

Misr National Steel  vs.  National Bank

Misr National Steel

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Misr National Steel are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Misr National reported solid returns over the last few months and may actually be approaching a breakup point.

National Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, National Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Misr National and National Bank

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

The idea behind Misr National Steel and National Bank 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.