Correlation Between Egyptian Gulf and B Investments
Can any of the company-specific risk be diversified away by investing in both Egyptian Gulf and B Investments 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 Gulf and B Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egyptian Gulf Bank and B Investments Holding, you can compare the effects of market volatilities on Egyptian Gulf and B Investments 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 Gulf with a short position of B Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Gulf and B Investments.
Diversification Opportunities for Egyptian Gulf and B Investments
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Egyptian and BINV is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Gulf Bank and B Investments Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Investments Holding and Egyptian Gulf 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 Gulf Bank are associated (or correlated) with B Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Investments Holding has no effect on the direction of Egyptian Gulf i.e., Egyptian Gulf and B Investments go up and down completely randomly.
Pair Corralation between Egyptian Gulf and B Investments
Assuming the 90 days trading horizon Egyptian Gulf Bank is expected to generate 0.83 times more return on investment than B Investments. However, Egyptian Gulf Bank is 1.21 times less risky than B Investments. It trades about 0.06 of its potential returns per unit of risk. B Investments Holding is currently generating about -0.11 per unit of risk. If you would invest 27.00 in Egyptian Gulf Bank on December 5, 2024 and sell it today you would earn a total of 1.00 from holding Egyptian Gulf Bank or generate 3.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Egyptian Gulf Bank vs. B Investments Holding
Performance |
Timeline |
Egyptian Gulf Bank |
B Investments Holding |
Egyptian Gulf and B Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Egyptian Gulf and B Investments
The main advantage of trading using opposite Egyptian Gulf and B Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Gulf position performs unexpectedly, B Investments 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 B Investments will offset losses from the drop in B Investments' long position.Egyptian Gulf vs. Arab Moltaka Investments | Egyptian Gulf vs. Nozha International Hospital | Egyptian Gulf vs. Delta Insurance | Egyptian Gulf vs. Egyptians For Investment |
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Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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