Correlation Between Commercial International and Fawry For

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

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

Diversification Opportunities for Commercial International and Fawry For

0.38

Correlation Coefficient

Commercial International  Fawry For

Weak diversification

The 3 months correlation between Commercial and Fawry is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank 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 Commercial International 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 Commercial International Bank 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 Commercial International i.e., Commercial International and Fawry For go up and down completely randomly.

Pair Corralation between Commercial International and Fawry For

Assuming the 90 days trading horizon Commercial International Bank Egypt is expected to under-perform the Fawry For. But the stock apears to be less risky and, when comparing its historical volatility, Commercial International Bank Egypt is 1.46 times less risky than Fawry For. The stock trades about -0.11 of its potential returns per unit of risk. The Fawry For Banking is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  887.00  in Fawry For Banking on December 4, 2024 and sell it today you would lose (45.00) from holding Fawry For Banking or give up 5.07% of portfolio value over 90 days.

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

Commercial International Bank   vs.  Fawry For Banking

Commercial International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Commercial International Bank 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

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 Commercial International and Fawry For

The main advantage of trading using opposite Commercial International and Fawry For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International 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 Commercial International Bank 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.