Correlation Between Juhayna Food and Iron

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

By analyzing existing cross correlation between Juhayna Food Industries and Iron And Steel, you can compare the effects of market volatilities on Juhayna Food and Iron 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 Juhayna Food with a short position of Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juhayna Food and Iron.

Diversification Opportunities for Juhayna Food and Iron

-0.79

Correlation Coefficient

Juhayna Food  Iron

Pay attention - limited upside

The 3 months correlation between Juhayna and Iron is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Juhayna Food Industries and Iron And Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron And Steel and Juhayna Food 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 Juhayna Food Industries are associated (or correlated) with Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron And Steel has no effect on the direction of Juhayna Food i.e., Juhayna Food and Iron go up and down completely randomly.

Pair Corralation between Juhayna Food and Iron

Assuming the 90 days trading horizon Juhayna Food Industries is expected to generate 2.15 times more return on investment than Iron. However, Juhayna Food is 2.15 times more volatile than Iron And Steel. It trades about 0.12 of its potential returns per unit of risk. Iron And Steel is currently generating about -0.05 per unit of risk. If you would invest  2,486  in Juhayna Food Industries on September 17, 2024 and sell it today you would earn a total of  639.00  from holding Juhayna Food Industries or generate 25.7% return on investment over 90 days.

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

Juhayna Food Industries  vs.  Iron And Steel

Juhayna Food Industries

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Juhayna Food Industries are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Juhayna Food reported solid returns over the last few months and may actually be approaching a breakup point.

Iron And Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iron And Steel 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 Juhayna Food and Iron

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

The idea behind Juhayna Food Industries and Iron And Steel 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.