Correlation Between Egyptian Iron and Gadwa For

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

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

Diversification Opportunities for Egyptian Iron and Gadwa For

-0.56

Correlation Coefficient

Egyptian Iron  Gadwa For

Excellent diversification

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

Pair Corralation between Egyptian Iron and Gadwa For

Assuming the 90 days trading horizon Egyptian Iron Steel is expected to generate 0.84 times more return on investment than Gadwa For. However, Egyptian Iron Steel is 1.18 times less risky than Gadwa For. It trades about 0.17 of its potential returns per unit of risk. Gadwa For Industrial is currently generating about 0.12 per unit of risk. If you would invest  722.00  in Egyptian Iron Steel on October 10, 2024 and sell it today you would earn a total of  4,261  from holding Egyptian Iron Steel or generate 590.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.74%
Values	Daily Returns

Egyptian Iron Steel  vs.  Gadwa For Industrial

Egyptian Iron Steel

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptian Iron Steel are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Egyptian Iron reported solid returns over the last few months and may actually be approaching a breakup point.

Gadwa For Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gadwa For Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Egyptian Iron and Gadwa For

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

The idea behind Egyptian Iron Steel and Gadwa For Industrial 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.