Correlation Between Credit Agricole and Misr Chemical

Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Misr Chemical 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 Misr Chemical 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 Misr Chemical Industries, you can compare the effects of market volatilities on Credit Agricole and Misr Chemical 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 Misr Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Misr Chemical.

Diversification Opportunities for Credit Agricole and Misr Chemical

0.0

Correlation Coefficient

Credit Agricole  Misr Chemical

Pay attention - limited upside

The 3 months correlation between Credit and Misr is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole Egypt and Misr Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr Chemical Industries 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 Misr Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr Chemical Industries has no effect on the direction of Credit Agricole i.e., Credit Agricole and Misr Chemical go up and down completely randomly.

Pair Corralation between Credit Agricole and Misr Chemical

If you would invest (100.00) in Misr Chemical Industries on October 11, 2024 and sell it today you would earn a total of  100.00  from holding Misr Chemical Industries or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Credit Agricole Egypt  vs.  Misr Chemical Industries

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 nearly stable technical and fundamental indicators, Credit Agricole is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Misr Chemical Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Misr Chemical Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Misr Chemical 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 Misr Chemical

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

The idea behind Credit Agricole Egypt and Misr Chemical Industries 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.