Correlation Between Al Khair and Global Telecom

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

By analyzing existing cross correlation between Al Khair River and Global Telecom Holding, you can compare the effects of market volatilities on Al Khair and Global Telecom 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 Al Khair with a short position of Global Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Khair and Global Telecom.

Diversification Opportunities for Al Khair and Global Telecom

0.0

Correlation Coefficient

Al Khair  Global Telecom

Pay attention - limited upside

The 3 months correlation between KRDI and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Al Khair River and Global Telecom Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Telecom Holding and Al Khair 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 Al Khair River are associated (or correlated) with Global Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Telecom Holding has no effect on the direction of Al Khair i.e., Al Khair and Global Telecom go up and down completely randomly.

Pair Corralation between Al Khair and Global Telecom

If you would invest  57.00  in Al Khair River on October 8, 2024 and sell it today you would earn a total of  1.00  from holding Al Khair River or generate 1.75% return on investment over 90 days.

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

Al Khair River  vs.  Global Telecom Holding

Al Khair River

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Al Khair River are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Al Khair reported solid returns over the last few months and may actually be approaching a breakup point.

Global Telecom Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Telecom Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Global Telecom is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Al Khair and Global Telecom

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

The idea behind Al Khair River and Global Telecom Holding 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..