Correlation Between Dice Sport and Egyptian Financial

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

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

Diversification Opportunities for Dice Sport and Egyptian Financial

0.45

Correlation Coefficient

Dice Sport  Egyptian Financial

Very weak diversification

The 3 months correlation between Dice and Egyptian is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dice Sport Casual and Egyptian Financial Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Financial and Dice Sport 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 Dice Sport Casual 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 Dice Sport i.e., Dice Sport and Egyptian Financial go up and down completely randomly.

Pair Corralation between Dice Sport and Egyptian Financial

Assuming the 90 days trading horizon Dice Sport Casual is expected to generate 0.98 times more return on investment than Egyptian Financial. However, Dice Sport Casual is 1.02 times less risky than Egyptian Financial. It trades about 0.16 of its potential returns per unit of risk. Egyptian Financial Industrial is currently generating about 0.14 per unit of risk. If you would invest  85.00  in Dice Sport Casual on September 17, 2024 and sell it today you would earn a total of  163.00  from holding Dice Sport Casual or generate 191.76% return on investment over 90 days.

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

Dice Sport Casual  vs.  Egyptian Financial Industrial

Dice Sport Casual

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dice Sport Casual are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Dice Sport reported solid returns over the last few months and may actually be approaching a breakup point.

Egyptian Financial

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptian Financial Industrial are ranked lower than 19 (%) 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 Dice Sport and Egyptian Financial

The main advantage of trading using opposite Dice Sport and Egyptian Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dice Sport 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 Dice Sport Casual 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .