Correlation Between Egyptian Financial and Industrial Engineering

Can any of the company-specific risk be diversified away by investing in both Egyptian Financial and Industrial Engineering 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 Industrial Engineering 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 Industrial Engineering Projects, you can compare the effects of market volatilities on Egyptian Financial and Industrial Engineering 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 Industrial Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Financial and Industrial Engineering.

Diversification Opportunities for Egyptian Financial and Industrial Engineering

0.0

Correlation Coefficient

Egyptian Financial  Industrial Engineering

Pay attention - limited upside

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

Pair Corralation between Egyptian Financial and Industrial Engineering

Assuming the 90 days trading horizon Egyptian Financial Industrial is expected to generate 0.8 times more return on investment than Industrial Engineering. However, Egyptian Financial Industrial is 1.25 times less risky than Industrial Engineering. It trades about 0.13 of its potential returns per unit of risk. Industrial Engineering Projects is currently generating about 0.08 per unit of risk. If you would invest  14,243  in Egyptian Financial Industrial on October 10, 2024 and sell it today you would earn a total of  1,757  from holding Egyptian Financial Industrial or generate 12.34% return on investment over 90 days.

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

Egyptian Financial Industrial  vs.  Industrial Engineering Project

Egyptian Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptian Financial Industrial are ranked lower than 9 (%) 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.

Industrial Engineering

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Engineering Projects are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Industrial Engineering may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Egyptian Financial and Industrial Engineering

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

The idea behind Egyptian Financial Industrial and Industrial Engineering Projects 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 Commodity Directory module to find actively traded commodities issued by global exchanges.