Correlation Between Paramount Global and Anghami Warrants

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

By analyzing existing cross correlation between Paramount Global Class and Anghami Warrants, you can compare the effects of market volatilities on Paramount Global and Anghami Warrants 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 Paramount Global with a short position of Anghami Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramount Global and Anghami Warrants.

Diversification Opportunities for Paramount Global and Anghami Warrants

0.41

Correlation Coefficient

Paramount Global  Anghami Warrants

Very weak diversification

The 3 months correlation between Paramount and Anghami is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Global Class and Anghami Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anghami Warrants and Paramount Global 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 Paramount Global Class are associated (or correlated) with Anghami Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anghami Warrants has no effect on the direction of Paramount Global i.e., Paramount Global and Anghami Warrants go up and down completely randomly.

Pair Corralation between Paramount Global and Anghami Warrants

Given the investment horizon of 90 days Paramount Global Class is expected to under-perform the Anghami Warrants. But the stock apears to be less risky and, when comparing its historical volatility, Paramount Global Class is 46.54 times less risky than Anghami Warrants. The stock trades about -0.03 of its potential returns per unit of risk. The Anghami Warrants is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Anghami Warrants on September 28, 2024 and sell it today you would lose (1.93) from holding Anghami Warrants or give up 48.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	64.68%
Values	Daily Returns

Paramount Global Class  vs.  Anghami Warrants

Paramount Global Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paramount Global Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Paramount Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Anghami Warrants

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anghami Warrants are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical indicators, Anghami Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Paramount Global and Anghami Warrants

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

The idea behind Paramount Global Class and Anghami Warrants 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.