Correlation Between El Nasr and Cairo For

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

By analyzing existing cross correlation between El Nasr Clothes and Cairo For Investment, you can compare the effects of market volatilities on El Nasr and Cairo For 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 El Nasr with a short position of Cairo For. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Nasr and Cairo For.

Diversification Opportunities for El Nasr and Cairo For

0.03

Correlation Coefficient

El Nasr  Cairo For

Significant diversification

The 3 months correlation between KABO and Cairo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding El Nasr Clothes and Cairo For Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo For Investment and El Nasr 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 El Nasr Clothes are associated (or correlated) with Cairo For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo For Investment has no effect on the direction of El Nasr i.e., El Nasr and Cairo For go up and down completely randomly.

Pair Corralation between El Nasr and Cairo For

Assuming the 90 days trading horizon El Nasr Clothes is expected to generate 4.84 times more return on investment than Cairo For. However, El Nasr is 4.84 times more volatile than Cairo For Investment. It trades about 0.43 of its potential returns per unit of risk. Cairo For Investment is currently generating about 0.05 per unit of risk. If you would invest  282.00  in El Nasr Clothes on September 17, 2024 and sell it today you would earn a total of  109.00  from holding El Nasr Clothes or generate 38.65% return on investment over 90 days.

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

El Nasr Clothes  vs.  Cairo For Investment

El Nasr Clothes

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in El Nasr Clothes are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, El Nasr reported solid returns over the last few months and may actually be approaching a breakup point.

Cairo For Investment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cairo For Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Cairo For may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with El Nasr and Cairo For

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

The idea behind El Nasr Clothes and Cairo For Investment 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.