Question Solved1 Answer Q5- use a line graph to show the stock price for SABIC and SADAFCO with the market index “5 years” then describe the graph and what is your conclusion. In the conclusion, give your opinion about the correlation and how the company moves in comparison to the market index? If they move together why and if they move inconsistently why? Think about the volatility and beta. In addition, is it good to invest in both companies to diversify? 100 50 0 '16 Jan '17 Jul 17 Jan '18 Jul '18 Jan '19 Jul '19 Jan 20 Jul 20 Jan 21 Saudi Basic Industries Corp. 200 0 '16 Jan '17 Jul '17 Jan '18 Jul '18 Jan '19 Jul 19 Jan '20 Jul 20 Jan 21 Saudia Dairy and Foodstuff Co. Thursday, Dec 19 Tadawul All Share Index (TASI): 8,291.39 10,000 Index 5,000 Jul '16 Jan '17 Jul '17 Jan '18 Jul '18 Jan '19 Jul 19 Jan 20 Jul 20 Jan 21 Time Tadawul All Share Index (TASI)

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Q5- use a line graph to show the stock price for SABIC and SADAFCO with the market index “5 years” then describe the graph and what is your conclusion. In the conclusion, give your opinion about the correlation and how the company moves in comparison to the market index? If they move together why and if they move inconsistently why? Think about the volatility and beta. In addition, is it good to invest in both companies to diversify?

Transcribed Image Text: 100 50 0 '16 Jan '17 Jul 17 Jan '18 Jul '18 Jan '19 Jul '19 Jan 20 Jul 20 Jan 21 Saudi Basic Industries Corp. 200 0 '16 Jan '17 Jul '17 Jan '18 Jul '18 Jan '19 Jul 19 Jan '20 Jul 20 Jan 21 Saudia Dairy and Foodstuff Co. Thursday, Dec 19 Tadawul All Share Index (TASI): 8,291.39 10,000 Index 5,000 Jul '16 Jan '17 Jul '17 Jan '18 Jul '18 Jan '19 Jul 19 Jan 20 Jul 20 Jan 21 Time Tadawul All Share Index (TASI)
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Transcribed Image Text: 100 50 0 '16 Jan '17 Jul 17 Jan '18 Jul '18 Jan '19 Jul '19 Jan 20 Jul 20 Jan 21 Saudi Basic Industries Corp. 200 0 '16 Jan '17 Jul '17 Jan '18 Jul '18 Jan '19 Jul 19 Jan '20 Jul 20 Jan 21 Saudia Dairy and Foodstuff Co. Thursday, Dec 19 Tadawul All Share Index (TASI): 8,291.39 10,000 Index 5,000 Jul '16 Jan '17 Jul '17 Jan '18 Jul '18 Jan '19 Jul 19 Jan 20 Jul 20 Jan 21 Time Tadawul All Share Index (TASI)
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The first graph is for SABIC, second one for SADAFCO and the third one for the market. On the lowe part of all graphs are the trading volumes. Looking at all the given 3 graphs, listed below the conclusion: Beta measures the responsiveness of a stock's price to changes in the overall stock market. SABIC's beta is low. Its movements is not in succ with the broader market.On the other hand SADAFCO's movement in th ... See the full answer