Correlation Between Global Knafaim and Mobile Max

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

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

Diversification Opportunities for Global Knafaim and Mobile Max

0.31

Correlation Coefficient

Global Knafaim  Mobile Max

Weak diversification

The 3 months correlation between Global and Mobile is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and Mobile Max M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Max M and Global Knafaim 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 Global Knafaim Leasing are associated (or correlated) with Mobile Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Max M has no effect on the direction of Global Knafaim i.e., Global Knafaim and Mobile Max go up and down completely randomly.

Pair Corralation between Global Knafaim and Mobile Max

Assuming the 90 days trading horizon Global Knafaim is expected to generate 1.67 times less return on investment than Mobile Max. But when comparing it to its historical volatility, Global Knafaim Leasing is 2.25 times less risky than Mobile Max. It trades about 0.17 of its potential returns per unit of risk. Mobile Max M is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3,650  in Mobile Max M on October 20, 2024 and sell it today you would earn a total of  930.00  from holding Mobile Max M or generate 25.48% return on investment over 90 days.

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

Global Knafaim Leasing  vs.  Mobile Max M

Global Knafaim Leasing

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Knafaim Leasing are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Global Knafaim sustained solid returns over the last few months and may actually be approaching a breakup point.

Mobile Max M

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mobile Max M are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mobile Max sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Knafaim and Mobile Max

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

The idea behind Global Knafaim Leasing and Mobile Max M 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.