Correlation Between El Nasr and Dice Sport

Can any of the company-specific risk be diversified away by investing in both El Nasr and Dice Sport 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 Dice Sport 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 Dice Sport Casual, you can compare the effects of market volatilities on El Nasr and Dice Sport 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 Dice Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Nasr and Dice Sport.

Diversification Opportunities for El Nasr and Dice Sport

0.86

Correlation Coefficient

El Nasr  Dice Sport

Very poor diversification

The 3 months correlation between KABO and Dice is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding El Nasr Clothes and Dice Sport Casual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dice Sport Casual 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 Dice Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dice Sport Casual has no effect on the direction of El Nasr i.e., El Nasr and Dice Sport go up and down completely randomly.

Pair Corralation between El Nasr and Dice Sport

Assuming the 90 days trading horizon El Nasr Clothes is expected to generate 1.41 times more return on investment than Dice Sport. However, El Nasr is 1.41 times more volatile than Dice Sport Casual. It trades about 0.43 of its potential returns per unit of risk. Dice Sport Casual is currently generating about 0.22 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	Strong
Accuracy	100.0%
Values	Daily Returns

El Nasr Clothes  vs.  Dice Sport Casual

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.

Dice Sport Casual

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dice Sport Casual are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Dice Sport reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with El Nasr and Dice Sport

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

The idea behind El Nasr Clothes and Dice Sport Casual 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.