Correlation Between Nile City and Arabia Investments

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

By analyzing existing cross correlation between Nile City Investment and Arabia Investments Holding, you can compare the effects of market volatilities on Nile City and Arabia Investments 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 Nile City with a short position of Arabia Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nile City and Arabia Investments.

Diversification Opportunities for Nile City and Arabia Investments

0.0

Correlation Coefficient

Nile City  Arabia Investments

Pay attention - limited upside

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

Pair Corralation between Nile City and Arabia Investments

If you would invest  34,428  in Nile City Investment on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Nile City Investment or generate 0.0% return on investment over 90 days.

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

Nile City Investment  vs.  Arabia Investments Holding

Nile City Investment

Risk-Adjusted Performance

Very Weak

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

Arabia Investments

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Nile City and Arabia Investments

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

The idea behind Nile City Investment and Arabia Investments 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.