Correlation Between Zahraa Maadi and Nozha International

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

Diversification Opportunities for Zahraa Maadi and Nozha International

0.06

Correlation Coefficient

Zahraa Maadi  Nozha International

Significant diversification

The 3 months correlation between Zahraa and Nozha is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Zahraa Maadi Investment and Nozha International Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nozha International 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 Nozha International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nozha International has no effect on the direction of Zahraa Maadi i.e., Zahraa Maadi and Nozha International go up and down completely randomly.

Pair Corralation between Zahraa Maadi and Nozha International

Assuming the 90 days trading horizon Zahraa Maadi is expected to generate 14.12 times less return on investment than Nozha International. But when comparing it to its historical volatility, Zahraa Maadi Investment is 1.87 times less risky than Nozha International. It trades about 0.03 of its potential returns per unit of risk. Nozha International Hospital is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  640.00  in Nozha International Hospital on September 16, 2024 and sell it today you would earn a total of  295.00  from holding Nozha International Hospital or generate 46.09% return on investment over 90 days.

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

Zahraa Maadi Investment  vs.  Nozha International Hospital

Zahraa Maadi Investment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zahraa Maadi Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Zahraa Maadi is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nozha International

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nozha International Hospital are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Nozha International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zahraa Maadi and Nozha International

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

The idea behind Zahraa Maadi Investment and Nozha International Hospital 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..