Correlation Between Nozha International and Sidi Kerir

Can any of the company-specific risk be diversified away by investing in both Nozha International and Sidi Kerir 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 Sidi Kerir 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 Sidi Kerir Petrochemicals, you can compare the effects of market volatilities on Nozha International and Sidi Kerir 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 Sidi Kerir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nozha International and Sidi Kerir.

Diversification Opportunities for Nozha International and Sidi Kerir

-0.84

Correlation Coefficient

Nozha International  Sidi Kerir

Pay attention - limited upside

The 3 months correlation between Nozha and Sidi is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nozha International Hospital and Sidi Kerir Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidi Kerir Petrochemicals 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 Sidi Kerir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidi Kerir Petrochemicals has no effect on the direction of Nozha International i.e., Nozha International and Sidi Kerir go up and down completely randomly.

Pair Corralation between Nozha International and Sidi Kerir

Assuming the 90 days trading horizon Nozha International Hospital is expected to generate 1.15 times more return on investment than Sidi Kerir. However, Nozha International is 1.15 times more volatile than Sidi Kerir Petrochemicals. It trades about 0.17 of its potential returns per unit of risk. Sidi Kerir Petrochemicals is currently generating about -0.28 per unit of risk. If you would invest  695.00  in Nozha International Hospital on September 27, 2024 and sell it today you would earn a total of  193.00  from holding Nozha International Hospital or generate 27.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Nozha International Hospital  vs.  Sidi Kerir Petrochemicals

Nozha International

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nozha International Hospital are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Nozha International reported solid returns over the last few months and may actually be approaching a breakup point.

Sidi Kerir Petrochemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sidi Kerir Petrochemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nozha International and Sidi Kerir

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

The idea behind Nozha International Hospital and Sidi Kerir Petrochemicals 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 Global Correlations module to find global opportunities by holding instruments from different markets.