Correlation Between Nozha International and Egyptian Media

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

By analyzing existing cross correlation between Nozha International Hospital and Egyptian Media Production, you can compare the effects of market volatilities on Nozha International and Egyptian Media 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 Nozha International with a short position of Egyptian Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nozha International and Egyptian Media.

Diversification Opportunities for Nozha International and Egyptian Media

0.24

Correlation Coefficient

Nozha International  Egyptian Media

Modest diversification

The 3 months correlation between Nozha and Egyptian is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nozha International Hospital and Egyptian Media Production in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Media Production and Nozha International 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 Nozha International Hospital are associated (or correlated) with Egyptian Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Media Production has no effect on the direction of Nozha International i.e., Nozha International and Egyptian Media go up and down completely randomly.

Pair Corralation between Nozha International and Egyptian Media

Assuming the 90 days trading horizon Nozha International Hospital is expected to generate 1.35 times more return on investment than Egyptian Media. However, Nozha International is 1.35 times more volatile than Egyptian Media Production. It trades about 0.01 of its potential returns per unit of risk. Egyptian Media Production is currently generating about -0.04 per unit of risk. If you would invest  863.00  in Nozha International Hospital on December 4, 2024 and sell it today you would lose (13.00) from holding Nozha International Hospital or give up 1.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.0%
Values	Daily Returns

Nozha International Hospital  vs.  Egyptian Media Production

Nozha International

Risk-Adjusted Performance

Very Weak

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

Egyptian Media Production

Risk-Adjusted Performance

Very Weak

Over the last 90 days Egyptian Media Production has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Nozha International and Egyptian Media

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

The idea behind Nozha International Hospital and Egyptian Media Production 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.