Correlation Between Ismailia Development and Misr Oils

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

By analyzing existing cross correlation between Ismailia Development and and Misr Oils Soap, you can compare the effects of market volatilities on Ismailia Development and Misr Oils 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 Ismailia Development with a short position of Misr Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ismailia Development and Misr Oils.

Diversification Opportunities for Ismailia Development and Misr Oils

-0.68

Correlation Coefficient

Ismailia Development  Misr Oils

Excellent diversification

The 3 months correlation between Ismailia and Misr is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ismailia Development and and Misr Oils Soap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr Oils Soap and Ismailia Development 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 Ismailia Development and are associated (or correlated) with Misr Oils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr Oils Soap has no effect on the direction of Ismailia Development i.e., Ismailia Development and Misr Oils go up and down completely randomly.

Pair Corralation between Ismailia Development and Misr Oils

Assuming the 90 days trading horizon Ismailia Development and is expected to generate 4.08 times more return on investment than Misr Oils. However, Ismailia Development is 4.08 times more volatile than Misr Oils Soap. It trades about 0.2 of its potential returns per unit of risk. Misr Oils Soap is currently generating about -0.15 per unit of risk. If you would invest  1,424  in Ismailia Development and on December 4, 2024 and sell it today you would earn a total of  730.00  from holding Ismailia Development and or generate 51.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.0%
Values	Daily Returns

Ismailia Development and  vs.  Misr Oils Soap

Ismailia Development and

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ismailia Development and are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Ismailia Development reported solid returns over the last few months and may actually be approaching a breakup point.

Misr Oils Soap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Misr Oils Soap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ismailia Development and Misr Oils

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

The idea behind Ismailia Development and and Misr Oils Soap 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.