Correlation Between Emaar Misr and Misr National
Can any of the company-specific risk be diversified away by investing in both Emaar Misr and Misr National 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 Emaar Misr and Misr National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emaar Misr for and Misr National Steel, you can compare the effects of market volatilities on Emaar Misr and Misr National 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 Emaar Misr with a short position of Misr National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emaar Misr and Misr National.
Diversification Opportunities for Emaar Misr and Misr National
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emaar and Misr is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Emaar Misr for and Misr National Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr National Steel and Emaar Misr 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 Emaar Misr for are associated (or correlated) with Misr National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr National Steel has no effect on the direction of Emaar Misr i.e., Emaar Misr and Misr National go up and down completely randomly.
Pair Corralation between Emaar Misr and Misr National
Assuming the 90 days trading horizon Emaar Misr for is expected to generate 1.31 times more return on investment than Misr National. However, Emaar Misr is 1.31 times more volatile than Misr National Steel. It trades about 0.06 of its potential returns per unit of risk. Misr National Steel is currently generating about -0.05 per unit of risk. If you would invest 785.00 in Emaar Misr for on September 23, 2024 and sell it today you would earn a total of 14.00 from holding Emaar Misr for or generate 1.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Emaar Misr for vs. Misr National Steel
Performance |
Timeline |
Emaar Misr for |
Misr National Steel |
Emaar Misr and Misr National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Emaar Misr and Misr National
The main advantage of trading using opposite Emaar Misr and Misr National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emaar Misr position performs unexpectedly, Misr National 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 Misr National will offset losses from the drop in Misr National's long position.Emaar Misr vs. Memphis Pharmaceuticals | Emaar Misr vs. Paint Chemicals Industries | Emaar Misr vs. Egyptians For Investment | Emaar Misr vs. Global Telecom Holding |
Misr National vs. Memphis Pharmaceuticals | Misr National vs. Paint Chemicals Industries | Misr National vs. Egyptians For Investment | Misr National vs. Global Telecom Holding |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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