Correlation Between Nasdaq and Ismailia National

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

By analyzing existing cross correlation between Nasdaq Inc and Ismailia National Food, you can compare the effects of market volatilities on Nasdaq and Ismailia National 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 Nasdaq with a short position of Ismailia National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Ismailia National.

Diversification Opportunities for Nasdaq and Ismailia National

0.23

Correlation Coefficient

Nasdaq  Ismailia National

Modest diversification

The 3 months correlation between Nasdaq and Ismailia is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Ismailia National Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ismailia National Food and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Ismailia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ismailia National Food has no effect on the direction of Nasdaq i.e., Nasdaq and Ismailia National go up and down completely randomly.

Pair Corralation between Nasdaq and Ismailia National

Given the investment horizon of 90 days Nasdaq is expected to generate 17.49 times less return on investment than Ismailia National. But when comparing it to its historical volatility, Nasdaq Inc is 6.45 times less risky than Ismailia National. It trades about 0.02 of its potential returns per unit of risk. Ismailia National Food is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,827  in Ismailia National Food on December 5, 2024 and sell it today you would earn a total of  727.00  from holding Ismailia National Food or generate 10.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	83.05%
Values	Daily Returns

Nasdaq Inc  vs.  Ismailia National Food

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Ismailia National Food

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ismailia National Food are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Ismailia National reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nasdaq and Ismailia National

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

The idea behind Nasdaq Inc and Ismailia National Food 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.