Correlation Between Sidi Kerir and Ismailia National

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

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

Diversification Opportunities for Sidi Kerir and Ismailia National

-0.28

Correlation Coefficient

Sidi Kerir  Ismailia National

Very good diversification

The 3 months correlation between Sidi and Ismailia is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sidi Kerir Petrochemicals 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 Sidi Kerir 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 Sidi Kerir Petrochemicals 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 Sidi Kerir i.e., Sidi Kerir and Ismailia National go up and down completely randomly.

Pair Corralation between Sidi Kerir and Ismailia National

Assuming the 90 days trading horizon Sidi Kerir Petrochemicals is expected to under-perform the Ismailia National. In addition to that, Sidi Kerir is 1.67 times more volatile than Ismailia National Food. It trades about -0.18 of its total potential returns per unit of risk. Ismailia National Food is currently generating about 0.04 per unit of volatility. If you would invest  6,233  in Ismailia National Food on September 17, 2024 and sell it today you would earn a total of  168.00  from holding Ismailia National Food or generate 2.7% return on investment over 90 days.

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

Sidi Kerir Petrochemicals  vs.  Ismailia National Food

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 unsteady 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.

Ismailia National Food

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ismailia National Food are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Ismailia National is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sidi Kerir and Ismailia National

The main advantage of trading using opposite Sidi Kerir and Ismailia National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidi Kerir 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 Sidi Kerir Petrochemicals 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.