Correlation Between Zahraa Maadi and Cairo For

Can any of the company-specific risk be diversified away by investing in both Zahraa Maadi and Cairo For 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 Cairo For 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 Cairo For Investment, you can compare the effects of market volatilities on Zahraa Maadi and Cairo For 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 Cairo For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zahraa Maadi and Cairo For.

Diversification Opportunities for Zahraa Maadi and Cairo For

-0.68

Correlation Coefficient

Zahraa Maadi  Cairo For

Excellent diversification

The 3 months correlation between Zahraa and Cairo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Zahraa Maadi Investment and Cairo For Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo For Investment 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 Cairo For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo For Investment has no effect on the direction of Zahraa Maadi i.e., Zahraa Maadi and Cairo For go up and down completely randomly.

Pair Corralation between Zahraa Maadi and Cairo For

Assuming the 90 days trading horizon Zahraa Maadi Investment is expected to generate 0.73 times more return on investment than Cairo For. However, Zahraa Maadi Investment is 1.37 times less risky than Cairo For. It trades about -0.1 of its potential returns per unit of risk. Cairo For Investment is currently generating about -0.35 per unit of risk. If you would invest  338.00  in Zahraa Maadi Investment on December 5, 2024 and sell it today you would lose (7.00) from holding Zahraa Maadi Investment or give up 2.07% of portfolio value over 90 days.

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

Zahraa Maadi Investment  vs.  Cairo For Investment

Zahraa Maadi Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zahraa Maadi Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Cairo For Investment

Risk-Adjusted Performance

Modest

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

Pair Trading with Zahraa Maadi and Cairo For

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

The idea behind Zahraa Maadi Investment and Cairo For Investment 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.