Correlation Between Gadwa For and Cleopatra Hospital

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

By analyzing existing cross correlation between Gadwa For Industrial and Cleopatra Hospital, you can compare the effects of market volatilities on Gadwa For and Cleopatra Hospital 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 Gadwa For with a short position of Cleopatra Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gadwa For and Cleopatra Hospital.

Diversification Opportunities for Gadwa For and Cleopatra Hospital

-0.02

Correlation Coefficient

Gadwa For  Cleopatra Hospital

Good diversification

The 3 months correlation between Gadwa and Cleopatra is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Gadwa For Industrial and Cleopatra Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleopatra Hospital and Gadwa 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 Gadwa For Industrial are associated (or correlated) with Cleopatra Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleopatra Hospital has no effect on the direction of Gadwa For i.e., Gadwa For and Cleopatra Hospital go up and down completely randomly.

Pair Corralation between Gadwa For and Cleopatra Hospital

Assuming the 90 days trading horizon Gadwa For Industrial is expected to generate 1.95 times more return on investment than Cleopatra Hospital. However, Gadwa For is 1.95 times more volatile than Cleopatra Hospital. It trades about 0.24 of its potential returns per unit of risk. Cleopatra Hospital is currently generating about 0.15 per unit of risk. If you would invest  421.00  in Gadwa For Industrial on October 23, 2024 and sell it today you would earn a total of  48.00  from holding Gadwa For Industrial or generate 11.4% return on investment over 90 days.

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

Gadwa For Industrial  vs.  Cleopatra Hospital

Gadwa For Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gadwa For Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Cleopatra Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gadwa For and Cleopatra Hospital

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

The idea behind Gadwa For Industrial and Cleopatra Hospital 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.