Correlation Between Contact Financial and Speed Medical
Can any of the company-specific risk be diversified away by investing in both Contact Financial and Speed Medical 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 Speed Medical 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 Speed Medical, you can compare the effects of market volatilities on Contact Financial and Speed Medical 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 Speed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contact Financial and Speed Medical.
Diversification Opportunities for Contact Financial and Speed Medical
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Contact and Speed is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Contact Financial Holding and Speed Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Speed Medical 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 Speed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Speed Medical has no effect on the direction of Contact Financial i.e., Contact Financial and Speed Medical go up and down completely randomly.
Pair Corralation between Contact Financial and Speed Medical
Assuming the 90 days trading horizon Contact Financial Holding is expected to generate 2.25 times more return on investment than Speed Medical. However, Contact Financial is 2.25 times more volatile than Speed Medical. It trades about 0.07 of its potential returns per unit of risk. Speed Medical is currently generating about -0.07 per unit of risk. If you would invest 419.00 in Contact Financial Holding on September 3, 2024 and sell it today you would earn a total of 54.00 from holding Contact Financial Holding or generate 12.89% 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. Speed Medical
Performance |
| Timeline |
| Contact Financial Holding |
| Speed Medical |
Contact Financial and Speed Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contact Financial and Speed Medical
The main advantage of trading using opposite Contact Financial and Speed Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contact Financial position performs unexpectedly, Speed Medical 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 Speed Medical will offset losses from the drop in Speed Medical's long position.| Contact Financial vs. Paint Chemicals Industries | Contact Financial vs. Reacap Financial Investments | Contact Financial vs. Egyptians For Investment | Contact Financial vs. Misr Oils Soap |
| Speed Medical vs. Fawry For Banking | Speed Medical vs. Contact Financial Holding | Speed Medical vs. Cairo For Investment | Speed Medical vs. Export Development 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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