Correlation Between Cairo Educational and B Investments
Can any of the company-specific risk be diversified away by investing in both Cairo Educational and B Investments 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 Cairo Educational and B Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairo Educational Services and B Investments Holding, you can compare the effects of market volatilities on Cairo Educational and B Investments 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 Cairo Educational with a short position of B Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Educational and B Investments.
Diversification Opportunities for Cairo Educational and B Investments
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cairo and BINV is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Educational Services and B Investments Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Investments Holding and Cairo Educational 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 Cairo Educational Services are associated (or correlated) with B Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Investments Holding has no effect on the direction of Cairo Educational i.e., Cairo Educational and B Investments go up and down completely randomly.
Pair Corralation between Cairo Educational and B Investments
Assuming the 90 days trading horizon Cairo Educational Services is expected to generate 1.69 times more return on investment than B Investments. However, Cairo Educational is 1.69 times more volatile than B Investments Holding. It trades about 0.04 of its potential returns per unit of risk. B Investments Holding is currently generating about -0.12 per unit of risk. If you would invest 2,968 in Cairo Educational Services on November 5, 2024 and sell it today you would earn a total of 34.00 from holding Cairo Educational Services or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Educational Services vs. B Investments Holding
Performance |
| Timeline |
| Cairo Educational |
| B Investments Holding |
Cairo Educational and B Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Educational and B Investments
The main advantage of trading using opposite Cairo Educational and B Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Educational position performs unexpectedly, B Investments 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 B Investments will offset losses from the drop in B Investments' long position.| Cairo Educational vs. Grand Investment Capital | Cairo Educational vs. El Ahli Investment | Cairo Educational vs. Arabia Investments Holding | Cairo Educational vs. Arab Moltaka Investments |
| B Investments vs. General Silos Storage | B Investments vs. Misr Financial Investments | B Investments vs. Delta Insurance | B Investments vs. Union National Bank |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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