Correlation Between Qatar Natl and Egyptian Media

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

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

Diversification Opportunities for Qatar Natl and Egyptian Media

0.71

Correlation Coefficient

Qatar Natl  Egyptian Media

Poor diversification

The 3 months correlation between Qatar and Egyptian is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Qatar Natl Bank 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 Qatar Natl 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 Qatar Natl Bank 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 Qatar Natl i.e., Qatar Natl and Egyptian Media go up and down completely randomly.

Pair Corralation between Qatar Natl and Egyptian Media

Assuming the 90 days trading horizon Qatar Natl Bank is expected to under-perform the Egyptian Media. In addition to that, Qatar Natl is 1.24 times more volatile than Egyptian Media Production. It trades about -0.13 of its total potential returns per unit of risk. Egyptian Media Production is currently generating about -0.08 per unit of volatility. If you would invest  2,541  in Egyptian Media Production on September 16, 2024 and sell it today you would lose (51.00) from holding Egyptian Media Production or give up 2.01% of portfolio value over 90 days.

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

Qatar Natl Bank  vs.  Egyptian Media Production

Qatar Natl Bank

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Qatar Natl Bank are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Qatar Natl reported solid returns over the last few months and may actually be approaching a breakup point.

Egyptian Media Production

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Qatar Natl and Egyptian Media

The main advantage of trading using opposite Qatar Natl and Egyptian Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qatar Natl 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 Qatar Natl Bank 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.