Correlation Between Egyptians For and Act Financial

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

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

Diversification Opportunities for Egyptians For and Act Financial

0.22

Correlation Coefficient

Egyptians For  Act Financial

Modest diversification

The 3 months correlation between Egyptians and Act is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Egyptians For Investment and Act Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Act Financial and Egyptians For 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 Egyptians For Investment are associated (or correlated) with Act Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Act Financial has no effect on the direction of Egyptians For i.e., Egyptians For and Act Financial go up and down completely randomly.

Pair Corralation between Egyptians For and Act Financial

Assuming the 90 days trading horizon Egyptians For Investment is expected to under-perform the Act Financial. In addition to that, Egyptians For is 1.44 times more volatile than Act Financial. It trades about -0.05 of its total potential returns per unit of risk. Act Financial is currently generating about -0.03 per unit of volatility. If you would invest  376.00  in Act Financial on September 15, 2024 and sell it today you would lose (43.00) from holding Act Financial or give up 11.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	37.26%
Values	Daily Returns

Egyptians For Investment  vs.  Act Financial

Egyptians For Investment

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptians For Investment are ranked lower than 10 (%) 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.

Act Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Act Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Act Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Egyptians For and Act Financial

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

The idea behind Egyptians For Investment and Act Financial 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.