Correlation Between Copper For and Arab Moltaka

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

By analyzing existing cross correlation between Copper For Commercial and Arab Moltaka Investments, you can compare the effects of market volatilities on Copper For 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 Copper For with a short position of Arab Moltaka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper For and Arab Moltaka.

Diversification Opportunities for Copper For and Arab Moltaka

0.29

Correlation Coefficient

Copper For  Arab Moltaka

Modest diversification

The 3 months correlation between Copper and Arab is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Copper For Commercial 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 Copper For 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 Copper For Commercial 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 Copper For i.e., Copper For and Arab Moltaka go up and down completely randomly.

Pair Corralation between Copper For and Arab Moltaka

Assuming the 90 days trading horizon Copper For Commercial is expected to generate 1.46 times more return on investment than Arab Moltaka. However, Copper For is 1.46 times more volatile than Arab Moltaka Investments. It trades about 0.17 of its potential returns per unit of risk. Arab Moltaka Investments is currently generating about -0.03 per unit of risk. If you would invest  38.00  in Copper For Commercial on October 23, 2024 and sell it today you would earn a total of  4.00  from holding Copper For Commercial or generate 10.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Copper For Commercial  vs.  Arab Moltaka Investments

Copper For Commercial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copper For Commercial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Arab Moltaka Investments

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Copper For and Arab Moltaka

The main advantage of trading using opposite Copper For and Arab Moltaka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper For 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.

The idea behind Copper For Commercial and Arab Moltaka Investments 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.