Correlation Between Misr National and Ezz Steel
Can any of the company-specific risk be diversified away by investing in both Misr National and Ezz Steel 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 Misr National and Ezz Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr National Steel and Ezz Steel, you can compare the effects of market volatilities on Misr National and Ezz Steel 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 Misr National with a short position of Ezz Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr National and Ezz Steel.
Diversification Opportunities for Misr National and Ezz Steel
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Misr and Ezz is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Misr National Steel and Ezz Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ezz Steel and Misr 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 Misr National Steel are associated (or correlated) with Ezz Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ezz Steel has no effect on the direction of Misr National i.e., Misr National and Ezz Steel go up and down completely randomly.
Pair Corralation between Misr National and Ezz Steel
Assuming the 90 days trading horizon Misr National is expected to generate 1.23 times less return on investment than Ezz Steel. In addition to that, Misr National is 1.94 times more volatile than Ezz Steel. It trades about 0.12 of its total potential returns per unit of risk. Ezz Steel is currently generating about 0.28 per unit of volatility. If you would invest 11,200 in Ezz Steel on December 5, 2024 and sell it today you would earn a total of 2,531 from holding Ezz Steel or generate 22.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Misr National Steel vs. Ezz Steel
Performance |
Timeline |
Misr National Steel |
Ezz Steel |
Misr National and Ezz Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Misr National and Ezz Steel
The main advantage of trading using opposite Misr National and Ezz Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr National position performs unexpectedly, Ezz Steel 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 Ezz Steel will offset losses from the drop in Ezz Steel's long position.Misr National vs. Orascom Construction PLC | Misr National vs. Union National Bank | Misr National vs. Industrial Engineering Projects | Misr National vs. Natural Gas Mining |
Ezz Steel vs. Arab Moltaka Investments | Ezz Steel vs. B Investments Holding | Ezz Steel vs. Orascom Investment Holding | Ezz Steel vs. ODIN Investments |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Stocks Directory Find actively traded stocks across global markets | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |