Correlation Between Sharkia National and B Investments

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

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

Diversification Opportunities for Sharkia National and B Investments

0.62

Correlation Coefficient

Sharkia National  B Investments

Poor diversification

The 3 months correlation between Sharkia and BINV is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sharkia National Food and B Investments Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Investments Holding and Sharkia National 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 Sharkia National Food are associated (or correlated) with B Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Investments Holding has no effect on the direction of Sharkia National i.e., Sharkia National and B Investments go up and down completely randomly.

Pair Corralation between Sharkia National and B Investments

Assuming the 90 days trading horizon Sharkia National Food is expected to generate 1.88 times more return on investment than B Investments. However, Sharkia National is 1.88 times more volatile than B Investments Holding. It trades about 0.36 of its potential returns per unit of risk. B Investments Holding is currently generating about 0.12 per unit of risk. If you would invest  296.00  in Sharkia National Food on September 16, 2024 and sell it today you would earn a total of  262.00  from holding Sharkia National Food or generate 88.51% return on investment over 90 days.

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

Sharkia National Food  vs.  B Investments Holding

Sharkia National Food

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Sharkia National Food are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Sharkia National reported solid returns over the last few months and may actually be approaching a breakup point.

B Investments Holding

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in B Investments Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, B Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sharkia National and B Investments

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

The idea behind Sharkia National Food and B Investments Holding 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.