Correlation Between Credit Agricole and Ismailia National
Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Ismailia National 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 Credit Agricole and Ismailia National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Agricole Egypt and Ismailia National Food, you can compare the effects of market volatilities on Credit Agricole and Ismailia National 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 Credit Agricole with a short position of Ismailia National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Ismailia National.
Diversification Opportunities for Credit Agricole and Ismailia National
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Credit and Ismailia is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole Egypt and Ismailia National Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ismailia National Food and Credit Agricole 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 Credit Agricole Egypt are associated (or correlated) with Ismailia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ismailia National Food has no effect on the direction of Credit Agricole i.e., Credit Agricole and Ismailia National go up and down completely randomly.
Pair Corralation between Credit Agricole and Ismailia National
Assuming the 90 days trading horizon Credit Agricole Egypt is expected to generate 0.82 times more return on investment than Ismailia National. However, Credit Agricole Egypt is 1.22 times less risky than Ismailia National. It trades about 0.07 of its potential returns per unit of risk. Ismailia National Food is currently generating about 0.02 per unit of risk. If you would invest 1,480 in Credit Agricole Egypt on September 4, 2024 and sell it today you would earn a total of 680.00 from holding Credit Agricole Egypt or generate 45.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Agricole Egypt vs. Ismailia National Food
Performance |
| Timeline |
| Credit Agricole Egypt |
| Ismailia National Food |
Credit Agricole and Ismailia National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Agricole and Ismailia National
The main advantage of trading using opposite Credit Agricole and Ismailia National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole position performs unexpectedly, Ismailia National 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 Ismailia National will offset losses from the drop in Ismailia National's long position.| Credit Agricole vs. Paint Chemicals Industries | Credit Agricole vs. Egyptians For Investment | Credit Agricole vs. Misr Oils Soap | Credit Agricole vs. Global Telecom Holding |
| Ismailia National vs. Misr Chemical Industries | Ismailia National vs. Dice Sport Casual | Ismailia National vs. Gadwa For Industrial | Ismailia National vs. Cairo 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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