Correlation Between Danel and Global Knafaim

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

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

Diversification Opportunities for Danel and Global Knafaim

0.57

Correlation Coefficient

Danel  Global Knafaim

Very weak diversification

The 3 months correlation between Danel and Global is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Danel and Global Knafaim Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Knafaim Leasing and Danel 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 Danel are associated (or correlated) with Global Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Knafaim Leasing has no effect on the direction of Danel i.e., Danel and Global Knafaim go up and down completely randomly.

Pair Corralation between Danel and Global Knafaim

Assuming the 90 days trading horizon Danel is expected to under-perform the Global Knafaim. In addition to that, Danel is 1.03 times more volatile than Global Knafaim Leasing. It trades about -0.09 of its total potential returns per unit of risk. Global Knafaim Leasing is currently generating about 0.0 per unit of volatility. If you would invest  7,670  in Global Knafaim Leasing on December 31, 2024 and sell it today you would lose (30.00) from holding Global Knafaim Leasing or give up 0.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Danel  vs.  Global Knafaim Leasing

Danel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Danel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Global Knafaim Leasing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Knafaim Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Global Knafaim is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Danel and Global Knafaim

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

The idea behind Danel and Global Knafaim Leasing 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.