Correlation Between Arab Co and Extracted Oils
Can any of the company-specific risk be diversified away by investing in both Arab Co and Extracted 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 Arab Co and Extracted Oils into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arab Co for and Extracted Oils, you can compare the effects of market volatilities on Arab Co and Extracted 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 Arab Co with a short position of Extracted Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arab Co and Extracted Oils.
Diversification Opportunities for Arab Co and Extracted Oils
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arab and Extracted is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Arab Co for and Extracted Oils in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extracted Oils and Arab Co 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 Arab Co for are associated (or correlated) with Extracted Oils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extracted Oils has no effect on the direction of Arab Co i.e., Arab Co and Extracted Oils go up and down completely randomly.
Pair Corralation between Arab Co and Extracted Oils
Assuming the 90 days trading horizon Arab Co for is expected to under-perform the Extracted Oils. But the stock apears to be less risky and, when comparing its historical volatility, Arab Co for is 1.49 times less risky than Extracted Oils. The stock trades about -0.03 of its potential returns per unit of risk. The Extracted Oils is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 341.00 in Extracted Oils on April 25, 2025 and sell it today you would earn a total of 18.00 from holding Extracted Oils or generate 5.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Arab Co for vs. Extracted Oils
Performance |
Timeline |
Arab Co for |
Extracted Oils |
Arab Co and Extracted Oils Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arab Co and Extracted Oils
The main advantage of trading using opposite Arab Co and Extracted Oils positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arab Co position performs unexpectedly, Extracted 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 Extracted Oils will offset losses from the drop in Extracted Oils' long position.Arab Co vs. ODIN Investments | Arab Co vs. Zahraa Maadi Investment | Arab Co vs. Paint Chemicals Industries | Arab Co vs. Egyptian Iron Steel |
Extracted Oils vs. National Drilling | Extracted Oils vs. Credit Agricole Egypt | Extracted Oils vs. Sidi Kerir Petrochemicals | Extracted Oils vs. QALA For Financial |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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