Correlation Between Keyrus SA and Itissalat

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

By analyzing existing cross correlation between Keyrus SA and Itissalat Al Maghrib, you can compare the effects of market volatilities on Keyrus SA and Itissalat 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 Keyrus SA with a short position of Itissalat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyrus SA and Itissalat.

Diversification Opportunities for Keyrus SA and Itissalat

0.23

Correlation Coefficient

Keyrus SA  Itissalat

Modest diversification

The 3 months correlation between Keyrus and Itissalat is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Keyrus SA and Itissalat Al Maghrib in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itissalat Al Maghrib and Keyrus SA 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 Keyrus SA are associated (or correlated) with Itissalat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itissalat Al Maghrib has no effect on the direction of Keyrus SA i.e., Keyrus SA and Itissalat go up and down completely randomly.

Pair Corralation between Keyrus SA and Itissalat

Assuming the 90 days trading horizon Keyrus SA is expected to under-perform the Itissalat. In addition to that, Keyrus SA is 2.25 times more volatile than Itissalat Al Maghrib. It trades about -0.12 of its total potential returns per unit of risk. Itissalat Al Maghrib is currently generating about -0.01 per unit of volatility. If you would invest  800.00  in Itissalat Al Maghrib on September 26, 2024 and sell it today you would lose (5.00) from holding Itissalat Al Maghrib or give up 0.62% of portfolio value over 90 days.

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

Keyrus SA  vs.  Itissalat Al Maghrib

Keyrus SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keyrus SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Itissalat Al Maghrib

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Itissalat Al Maghrib has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Itissalat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Keyrus SA and Itissalat

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

The idea behind Keyrus SA and Itissalat Al Maghrib 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.