Correlation Between Sharkia National and Sidi Kerir

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

By analyzing existing cross correlation between Sharkia National Food and Sidi Kerir Petrochemicals, you can compare the effects of market volatilities on Sharkia National and Sidi Kerir 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 Sharkia National with a short position of Sidi Kerir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sharkia National and Sidi Kerir.

Diversification Opportunities for Sharkia National and Sidi Kerir

-0.56

Correlation Coefficient

Sharkia National  Sidi Kerir

Excellent diversification

The 3 months correlation between Sharkia and Sidi is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sharkia National Food and Sidi Kerir Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidi Kerir Petrochemicals and Sharkia National 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 Sharkia National Food are associated (or correlated) with Sidi Kerir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidi Kerir Petrochemicals has no effect on the direction of Sharkia National i.e., Sharkia National and Sidi Kerir go up and down completely randomly.

Pair Corralation between Sharkia National and Sidi Kerir

Assuming the 90 days trading horizon Sharkia National Food is expected to generate 1.29 times more return on investment than Sidi Kerir. However, Sharkia National is 1.29 times more volatile than Sidi Kerir Petrochemicals. It trades about 0.33 of its potential returns per unit of risk. Sidi Kerir Petrochemicals is currently generating about -0.19 per unit of risk. If you would invest  304.00  in Sharkia National Food on September 18, 2024 and sell it today you would earn a total of  238.00  from holding Sharkia National Food or generate 78.29% return on investment over 90 days.

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

Sharkia National Food  vs.  Sidi Kerir Petrochemicals

Sharkia National Food

Risk-Adjusted Performance

25 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Sharkia National Food are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Sharkia National reported solid returns over the last few months and may actually be approaching a breakup point.

Sidi Kerir Petrochemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sidi Kerir Petrochemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sharkia National and Sidi Kerir

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

The idea behind Sharkia National Food and Sidi Kerir Petrochemicals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.