Correlation Between Act Financial and Egyptian Financial
Can any of the company-specific risk be diversified away by investing in both Act Financial 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 Act Financial and Egyptian Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Act Financial and Egyptian Financial Industrial, you can compare the effects of market volatilities on Act Financial 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 Act Financial with a short position of Egyptian Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Act Financial and Egyptian Financial.
Diversification Opportunities for Act Financial and Egyptian Financial
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Act and Egyptian is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Act Financial and Egyptian Financial Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Financial and Act Financial 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 Act Financial 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 Act Financial i.e., Act Financial and Egyptian Financial go up and down completely randomly.
Pair Corralation between Act Financial and Egyptian Financial
Assuming the 90 days trading horizon Act Financial is expected to under-perform the Egyptian Financial. But the stock apears to be less risky and, when comparing its historical volatility, Act Financial is 1.07 times less risky than Egyptian Financial. The stock trades about -0.03 of its potential returns per unit of risk. The Egyptian Financial Industrial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,551 in Egyptian Financial Industrial on September 12, 2024 and sell it today you would earn a total of 10,447 from holding Egyptian Financial Industrial or generate 229.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.64% |
| Values | Daily Returns |
Act Financial vs. Egyptian Financial Industrial
Performance |
| Timeline |
| Act Financial |
| Egyptian Financial |
Act Financial and Egyptian Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Act Financial and Egyptian Financial
The main advantage of trading using opposite Act Financial and Egyptian Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Act Financial 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.| Act Financial vs. Paint Chemicals Industries | Act Financial vs. Reacap Financial Investments | Act Financial vs. Egyptians For Investment | Act Financial vs. Misr Oils Soap |
| Egyptian Financial vs. Paint Chemicals Industries | Egyptian Financial vs. Reacap Financial Investments | Egyptian Financial vs. Egyptians For Investment | Egyptian Financial vs. Misr Oils Soap |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |