Correlation Between Credit Agricole and Fawry For

Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Fawry For 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 Credit Agricole and Fawry For into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Credit Agricole Egypt and Fawry For Banking, you can compare the effects of market volatilities on Credit Agricole and Fawry For 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 Credit Agricole with a short position of Fawry For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Fawry For.

Diversification Opportunities for Credit Agricole and Fawry For

0.31

Correlation Coefficient

Credit Agricole  Fawry For

Weak diversification

The 3 months correlation between Credit and Fawry is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole Egypt and Fawry For Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fawry For Banking and Credit Agricole 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 Credit Agricole Egypt are associated (or correlated) with Fawry For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fawry For Banking has no effect on the direction of Credit Agricole i.e., Credit Agricole and Fawry For go up and down completely randomly.

Pair Corralation between Credit Agricole and Fawry For

Assuming the 90 days trading horizon Credit Agricole Egypt is expected to generate 1.02 times more return on investment than Fawry For. However, Credit Agricole is 1.02 times more volatile than Fawry For Banking. It trades about 0.07 of its potential returns per unit of risk. Fawry For Banking is currently generating about 0.04 per unit of risk. If you would invest  980.00  in Credit Agricole Egypt on September 28, 2024 and sell it today you would earn a total of  976.00  from holding Credit Agricole Egypt or generate 99.59% return on investment over 90 days.

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

Credit Agricole Egypt  vs.  Fawry For Banking

Credit Agricole Egypt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Agricole Egypt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Fawry For Banking

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fawry For Banking has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Fawry For is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Credit Agricole and Fawry For

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

The idea behind Credit Agricole Egypt and Fawry For Banking 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.