Correlation Between Egyptian Financial and Egyptians For

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

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

Diversification Opportunities for Egyptian Financial and Egyptians For

0.65

Correlation Coefficient

Egyptian Financial  Egyptians For

Poor diversification

The 3 months correlation between Egyptian and Egyptians is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Financial Industrial and Egyptians For Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptians For Investment and Egyptian Financial 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 Egyptian Financial Industrial are associated (or correlated) with Egyptians For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptians For Investment has no effect on the direction of Egyptian Financial i.e., Egyptian Financial and Egyptians For go up and down completely randomly.

Pair Corralation between Egyptian Financial and Egyptians For

Assuming the 90 days trading horizon Egyptian Financial Industrial is expected to generate 0.45 times more return on investment than Egyptians For. However, Egyptian Financial Industrial is 2.22 times less risky than Egyptians For. It trades about 0.23 of its potential returns per unit of risk. Egyptians For Investment is currently generating about 0.01 per unit of risk. If you would invest  14,483  in Egyptian Financial Industrial on October 8, 2024 and sell it today you would earn a total of  511.00  from holding Egyptian Financial Industrial or generate 3.53% return on investment over 90 days.

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

Egyptian Financial Industrial  vs.  Egyptians For Investment

Egyptian Financial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Egyptians For Investment

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptians For Investment are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Egyptians For reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Egyptian Financial and Egyptians For

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

The idea behind Egyptian Financial Industrial and Egyptians For Investment 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.