Correlation Between Emaar Misr and Al Tawfeek

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

By analyzing existing cross correlation between Emaar Misr for and Al Tawfeek Leasing, you can compare the effects of market volatilities on Emaar Misr and Al Tawfeek 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 Emaar Misr with a short position of Al Tawfeek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emaar Misr and Al Tawfeek.

Diversification Opportunities for Emaar Misr and Al Tawfeek

0.18

Correlation Coefficient

Emaar Misr  Al Tawfeek

Average diversification

The 3 months correlation between Emaar and ATLC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Emaar Misr for and Al Tawfeek Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Tawfeek Leasing and Emaar Misr 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 Emaar Misr for are associated (or correlated) with Al Tawfeek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Tawfeek Leasing has no effect on the direction of Emaar Misr i.e., Emaar Misr and Al Tawfeek go up and down completely randomly.

Pair Corralation between Emaar Misr and Al Tawfeek

Assuming the 90 days trading horizon Emaar Misr for is expected to generate 1.61 times more return on investment than Al Tawfeek. However, Emaar Misr is 1.61 times more volatile than Al Tawfeek Leasing. It trades about 0.1 of its potential returns per unit of risk. Al Tawfeek Leasing is currently generating about -0.01 per unit of risk. If you would invest  395.00  in Emaar Misr for on September 25, 2024 and sell it today you would earn a total of  370.00  from holding Emaar Misr for or generate 93.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.48%
Values	Daily Returns

Emaar Misr for  vs.  Al Tawfeek Leasing

Emaar Misr for

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emaar Misr for has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Al Tawfeek Leasing

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Al Tawfeek Leasing are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Al Tawfeek reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Emaar Misr and Al Tawfeek

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

The idea behind Emaar Misr for and Al Tawfeek Leasing 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.