Correlation Between Zahraa Maadi and B Investments

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

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

Diversification Opportunities for Zahraa Maadi and B Investments

-0.05

Correlation Coefficient

Zahraa Maadi  B Investments

Good diversification

The 3 months correlation between Zahraa and BINV is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Zahraa Maadi Investment 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 Zahraa Maadi 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 Zahraa Maadi Investment 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 Zahraa Maadi i.e., Zahraa Maadi and B Investments go up and down completely randomly.

Pair Corralation between Zahraa Maadi and B Investments

Assuming the 90 days trading horizon Zahraa Maadi Investment is expected to generate 1.12 times more return on investment than B Investments. However, Zahraa Maadi is 1.12 times more volatile than B Investments Holding. It trades about 0.08 of its potential returns per unit of risk. B Investments Holding is currently generating about -0.05 per unit of risk. If you would invest  319.00  in Zahraa Maadi Investment on December 29, 2024 and sell it today you would earn a total of  22.00  from holding Zahraa Maadi Investment or generate 6.9% return on investment over 90 days.

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

Zahraa Maadi Investment  vs.  B Investments Holding

Zahraa Maadi Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zahraa Maadi Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Zahraa Maadi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

B Investments Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days B Investments Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, B Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Zahraa Maadi and B Investments

The main advantage of trading using opposite Zahraa Maadi and B Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zahraa Maadi 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 Zahraa Maadi Investment 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.