Correlation Between Nile City and Misr Oils

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

By analyzing existing cross correlation between Nile City Investment and Misr Oils Soap, you can compare the effects of market volatilities on Nile City and Misr Oils 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 Nile City with a short position of Misr Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nile City and Misr Oils.

Diversification Opportunities for Nile City and Misr Oils

0.0

Correlation Coefficient

Nile City  Misr Oils

Pay attention - limited upside

The 3 months correlation between Nile and Misr is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nile City Investment and Misr Oils Soap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr Oils Soap and Nile City 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 Nile City Investment are associated (or correlated) with Misr Oils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr Oils Soap has no effect on the direction of Nile City i.e., Nile City and Misr Oils go up and down completely randomly.

Pair Corralation between Nile City and Misr Oils

If you would invest  5,856  in Misr Oils Soap on September 17, 2024 and sell it today you would earn a total of  158.00  from holding Misr Oils Soap or generate 2.7% return on investment over 90 days.

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

Nile City Investment  vs.  Misr Oils Soap

Nile City Investment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Misr Oils Soap

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Misr Oils Soap are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Misr Oils is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nile City and Misr Oils

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

The idea behind Nile City Investment and Misr Oils Soap 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.