Correlation Between Delta Construction and Egyptian Financial

Can any of the company-specific risk be diversified away by investing in both Delta Construction and Egyptian Financial 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 Delta Construction and Egyptian Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Delta Construction Rebuilding and Egyptian Financial Industrial, you can compare the effects of market volatilities on Delta Construction and Egyptian Financial 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 Delta Construction with a short position of Egyptian Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Construction and Egyptian Financial.

Diversification Opportunities for Delta Construction and Egyptian Financial

0.0

Correlation Coefficient

Delta Construction  Egyptian Financial

Pay attention - limited upside

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

Pair Corralation between Delta Construction and Egyptian Financial

If you would invest  10,558  in Egyptian Financial Industrial on September 16, 2024 and sell it today you would earn a total of  4,542  from holding Egyptian Financial Industrial or generate 43.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Delta Construction Rebuilding  vs.  Egyptian Financial Industrial

Delta Construction

Risk-Adjusted Performance

0 of 100

Very Weak

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

Egyptian Financial

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptian Financial Industrial are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Egyptian Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delta Construction and Egyptian Financial

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

The idea behind Delta Construction Rebuilding and Egyptian Financial Industrial 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 Transaction History module to view history of all your transactions and understand their impact on performance.