Correlation Between B Investments and Upper Egypt
Can any of the company-specific risk be diversified away by investing in both B Investments and Upper Egypt 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 B Investments and Upper Egypt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Investments Holding and Upper Egypt Flour, you can compare the effects of market volatilities on B Investments and Upper Egypt 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 B Investments with a short position of Upper Egypt. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Investments and Upper Egypt.
Diversification Opportunities for B Investments and Upper Egypt
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BINV and Upper is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding B Investments Holding and Upper Egypt Flour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upper Egypt Flour and B 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 B Investments Holding are associated (or correlated) with Upper Egypt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upper Egypt Flour has no effect on the direction of B Investments i.e., B Investments and Upper Egypt go up and down completely randomly.
Pair Corralation between B Investments and Upper Egypt
Assuming the 90 days trading horizon B Investments Holding is expected to generate 0.93 times more return on investment than Upper Egypt. However, B Investments Holding is 1.08 times less risky than Upper Egypt. It trades about -0.1 of its potential returns per unit of risk. Upper Egypt Flour is currently generating about -0.35 per unit of risk. If you would invest 2,442 in B Investments Holding on November 28, 2024 and sell it today you would lose (163.00) from holding B Investments Holding or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Investments Holding vs. Upper Egypt Flour
Performance |
| Timeline |
| B Investments Holding |
| Upper Egypt Flour |
B Investments and Upper Egypt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Investments and Upper Egypt
The main advantage of trading using opposite B Investments and Upper Egypt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Investments position performs unexpectedly, Upper Egypt 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 Upper Egypt will offset losses from the drop in Upper Egypt's long position.| B Investments vs. Mohandes Insurance | B Investments vs. Misr Financial Investments | B Investments vs. National Drilling | B Investments vs. Egypt Aluminum |
| Upper Egypt vs. Reacap Financial Investments | Upper Egypt vs. Export Development Bank | Upper Egypt vs. Cairo Educational Services | Upper Egypt vs. Egyptian Chemical Industries |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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