Correlation Between Alexandria New and Edita Food
Can any of the company-specific risk be diversified away by investing in both Alexandria New and Edita Food 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 Alexandria New and Edita Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alexandria New Medical and Edita Food Industries, you can compare the effects of market volatilities on Alexandria New and Edita Food 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 Alexandria New with a short position of Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexandria New and Edita Food.
Diversification Opportunities for Alexandria New and Edita Food
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alexandria and Edita is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Alexandria New Medical and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries and Alexandria New 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 Alexandria New Medical are associated (or correlated) with Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of Alexandria New i.e., Alexandria New and Edita Food go up and down completely randomly.
Pair Corralation between Alexandria New and Edita Food
Assuming the 90 days trading horizon Alexandria New Medical is expected to under-perform the Edita Food. In addition to that, Alexandria New is 1.2 times more volatile than Edita Food Industries. It trades about -0.12 of its total potential returns per unit of risk. Edita Food Industries is currently generating about -0.07 per unit of volatility. If you would invest 2,853 in Edita Food Industries on November 4, 2024 and sell it today you would lose (54.00) from holding Edita Food Industries or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alexandria New Medical vs. Edita Food Industries
Performance |
| Timeline |
| Alexandria New Medical |
| Edita Food Industries |
Alexandria New and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alexandria New and Edita Food
The main advantage of trading using opposite Alexandria New and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexandria New position performs unexpectedly, Edita Food 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 Edita Food will offset losses from the drop in Edita Food's long position.| Alexandria New vs. Paint Chemicals Industries | Alexandria New vs. Reacap Financial Investments | Alexandria New vs. Egyptians For Investment | Alexandria New vs. Misr Oils Soap |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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