Correlation Between ODIN Investments and Egyptian Financial

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

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

Diversification Opportunities for ODIN Investments and Egyptian Financial

-0.31

Correlation Coefficient

ODIN Investments  Egyptian Financial

Very good diversification

The 3 months correlation between ODIN and Egyptian is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ODIN Investments and Egyptian Financial Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Financial and ODIN Investments 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 ODIN Investments are associated (or correlated) with Egyptian Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Financial has no effect on the direction of ODIN Investments i.e., ODIN Investments and Egyptian Financial go up and down completely randomly.

Pair Corralation between ODIN Investments and Egyptian Financial

Assuming the 90 days trading horizon ODIN Investments is expected to under-perform the Egyptian Financial. In addition to that, ODIN Investments is 1.42 times more volatile than Egyptian Financial Industrial. It trades about -0.19 of its total potential returns per unit of risk. Egyptian Financial Industrial is currently generating about 0.36 per unit of volatility. If you would invest  15,025  in Egyptian Financial Industrial on October 20, 2024 and sell it today you would earn a total of  1,604  from holding Egyptian Financial Industrial or generate 10.68% return on investment over 90 days.

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

ODIN Investments  vs.  Egyptian Financial Industrial

ODIN Investments

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ODIN Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, ODIN Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Egyptian Financial

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptian Financial Industrial are ranked lower than 14 (%) 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.

Pair Trading with ODIN Investments and Egyptian Financial

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

The idea behind ODIN Investments and Egyptian Financial 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.