Correlation Between News Corp and Anghami Warrants

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

By analyzing existing cross correlation between News Corp A and Anghami Warrants, you can compare the effects of market volatilities on News Corp and Anghami Warrants 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 News Corp with a short position of Anghami Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and Anghami Warrants.

Diversification Opportunities for News Corp and Anghami Warrants

0.74

Correlation Coefficient

News Corp  Anghami Warrants

Poor diversification

The 3 months correlation between News and Anghami is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding News Corp A and Anghami Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anghami Warrants and News Corp 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 News Corp A are associated (or correlated) with Anghami Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anghami Warrants has no effect on the direction of News Corp i.e., News Corp and Anghami Warrants go up and down completely randomly.

Pair Corralation between News Corp and Anghami Warrants

Given the investment horizon of 90 days News Corp is expected to generate 43.82 times less return on investment than Anghami Warrants. But when comparing it to its historical volatility, News Corp A is 22.45 times less risky than Anghami Warrants. It trades about 0.08 of its potential returns per unit of risk. Anghami Warrants is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Anghami Warrants on September 22, 2024 and sell it today you would earn a total of  1.48  from holding Anghami Warrants or generate 59.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	59.38%
Values	Daily Returns

News Corp A  vs.  Anghami Warrants

News Corp A

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in News Corp A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, News Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Anghami Warrants

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anghami Warrants are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical indicators, Anghami Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with News Corp and Anghami Warrants

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

The idea behind News Corp A and Anghami Warrants 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.