Correlation Between Nile City and Misr Chemical

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Can any of the company-specific risk be diversified away by investing in both Nile City and Misr Chemical 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 Misr Chemical 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 Misr Chemical Industries, you can compare the effects of market volatilities on Nile City and Misr Chemical 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 Misr Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nile City and Misr Chemical.

Diversification Opportunities for Nile City and Misr Chemical

NileMisrDiversified AwayNileMisrDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Nile City and Misr Chemical

If you would invest  34,428  in Nile City Investment on September 23, 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 Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nile City Investment  vs.  Misr Chemical Industries

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 05101520
JavaScript chart by amCharts 3.21.15NCIN MICH
       Timeline  
Nile City Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec345350355
Misr Chemical Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Misr Chemical Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Misr Chemical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec293031323334353637

Nile City and Misr Chemical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.010.020.030.040.050.06
JavaScript chart by amCharts 3.21.15NCIN MICH
       Returns  

Pair Trading with Nile City and Misr Chemical

The main advantage of trading using opposite Nile City and Misr Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nile City position performs unexpectedly, Misr Chemical 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 Misr Chemical will offset losses from the drop in Misr Chemical's long position.
The idea behind Nile City Investment and Misr Chemical Industries 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.
Check out your portfolio center.
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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