Correlation Between B Investments and Arab Moltaka
Can any of the company-specific risk be diversified away by investing in both B Investments and Arab Moltaka 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 B Investments and Arab Moltaka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Investments Holding and Arab Moltaka Investments, you can compare the effects of market volatilities on B Investments and Arab Moltaka 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 B Investments with a short position of Arab Moltaka. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Investments and Arab Moltaka.
Diversification Opportunities for B Investments and Arab Moltaka
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BINV and Arab is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding B Investments Holding and Arab Moltaka Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arab Moltaka Investments and B Investments 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 B Investments Holding are associated (or correlated) with Arab Moltaka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arab Moltaka Investments has no effect on the direction of B Investments i.e., B Investments and Arab Moltaka go up and down completely randomly.
Pair Corralation between B Investments and Arab Moltaka
Assuming the 90 days trading horizon B Investments is expected to generate 1.68 times less return on investment than Arab Moltaka. But when comparing it to its historical volatility, B Investments Holding is 1.73 times less risky than Arab Moltaka. It trades about 0.12 of its potential returns per unit of risk. Arab Moltaka Investments is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 229.00 in Arab Moltaka Investments on September 16, 2024 and sell it today you would earn a total of 43.00 from holding Arab Moltaka Investments or generate 18.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
B Investments Holding vs. Arab Moltaka Investments
Performance |
Timeline |
B Investments Holding |
Arab Moltaka Investments |
B Investments and Arab Moltaka Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with B Investments and Arab Moltaka
The main advantage of trading using opposite B Investments and Arab Moltaka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Investments position performs unexpectedly, Arab Moltaka 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 Arab Moltaka will offset losses from the drop in Arab Moltaka's long position.B Investments vs. Sharkia National Food | B Investments vs. Misr Financial Investments | B Investments vs. Fawry For Banking | B Investments vs. Mohandes Insurance |
Arab Moltaka vs. Egyptian Media Production | Arab Moltaka vs. Sidi Kerir Petrochemicals | Arab Moltaka vs. Misr Chemical Industries | Arab Moltaka vs. Ismailia National Food |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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