Correlation Between Egyptians For and Ismailia National

Can any of the company-specific risk be diversified away by investing in both Egyptians For and Ismailia National 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 Ismailia National 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 Ismailia National Food, you can compare the effects of market volatilities on Egyptians For and Ismailia National 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 Ismailia National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptians For and Ismailia National.

Diversification Opportunities for Egyptians For and Ismailia National

0.56

Correlation Coefficient

Egyptians For  Ismailia National

Very weak diversification

The 3 months correlation between Egyptians and Ismailia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Egyptians For Investment and Ismailia National Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ismailia National Food 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 Ismailia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ismailia National Food has no effect on the direction of Egyptians For i.e., Egyptians For and Ismailia National go up and down completely randomly.

Pair Corralation between Egyptians For and Ismailia National

Assuming the 90 days trading horizon Egyptians For Investment is expected to generate 1.39 times more return on investment than Ismailia National. However, Egyptians For is 1.39 times more volatile than Ismailia National Food. It trades about 0.18 of its potential returns per unit of risk. Ismailia National Food is currently generating about 0.01 per unit of risk. If you would invest  23.00  in Egyptians For Investment on September 19, 2024 and sell it today you would earn a total of  2.00  from holding Egyptians For Investment or generate 8.7% return on investment over 90 days.

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

Egyptians For Investment  vs.  Ismailia National Food

Egyptians For Investment

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptians For Investment are ranked lower than 13 (%) 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.

Ismailia National Food

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ismailia National Food are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Ismailia National 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 Ismailia National

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

The idea behind Egyptians For Investment and Ismailia National Food 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .