Correlation Between Contact Financial and Emaar Misr
Can any of the company-specific risk be diversified away by investing in both Contact Financial and Emaar Misr 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 Contact Financial and Emaar Misr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Contact Financial Holding and Emaar Misr for, you can compare the effects of market volatilities on Contact Financial and Emaar Misr 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 Contact Financial with a short position of Emaar Misr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contact Financial and Emaar Misr.
Diversification Opportunities for Contact Financial and Emaar Misr
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Contact and Emaar is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Contact Financial Holding and Emaar Misr for in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emaar Misr for and Contact 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 Contact Financial Holding are associated (or correlated) with Emaar Misr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emaar Misr for has no effect on the direction of Contact Financial i.e., Contact Financial and Emaar Misr go up and down completely randomly.
Pair Corralation between Contact Financial and Emaar Misr
Assuming the 90 days trading horizon Contact Financial is expected to generate 2.67 times less return on investment than Emaar Misr. But when comparing it to its historical volatility, Contact Financial Holding is 1.11 times less risky than Emaar Misr. It trades about 0.03 of its potential returns per unit of risk. Emaar Misr for is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 321.00 in Emaar Misr for on October 12, 2024 and sell it today you would earn a total of 419.00 from holding Emaar Misr for or generate 130.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contact Financial Holding vs. Emaar Misr for
Performance |
| Timeline |
| Contact Financial Holding |
| Emaar Misr for |
Contact Financial and Emaar Misr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contact Financial and Emaar Misr
The main advantage of trading using opposite Contact Financial and Emaar Misr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contact Financial position performs unexpectedly, Emaar Misr 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 Emaar Misr will offset losses from the drop in Emaar Misr's long position.| Contact Financial vs. Cairo Educational Services | Contact Financial vs. Medical Packaging | Contact Financial vs. Union National Bank | Contact Financial vs. Reacap Financial Investments |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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