Correlation Between Commercial International and Misr National
Can any of the company-specific risk be diversified away by investing in both Commercial International and Misr 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 Commercial International and Misr National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial International Bank Egypt and Misr National Steel, you can compare the effects of market volatilities on Commercial International and Misr 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 Commercial International with a short position of Misr National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial International and Misr National.
Diversification Opportunities for Commercial International and Misr National
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commercial and Misr is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank and Misr National Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr National Steel and Commercial International 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 Commercial International Bank Egypt are associated (or correlated) with Misr National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr National Steel has no effect on the direction of Commercial International i.e., Commercial International and Misr National go up and down completely randomly.
Pair Corralation between Commercial International and Misr National
Assuming the 90 days trading horizon Commercial International Bank Egypt is expected to under-perform the Misr National. But the stock apears to be less risky and, when comparing its historical volatility, Commercial International Bank Egypt is 2.59 times less risky than Misr National. The stock trades about -0.1 of its potential returns per unit of risk. The Misr National Steel is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 531.00 in Misr National Steel on August 30, 2024 and sell it today you would lose (4.00) from holding Misr National Steel or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial International Bank vs. Misr National Steel
Performance |
| Timeline |
| Commercial International |
| Misr National Steel |
Commercial International and Misr National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial International and Misr National
The main advantage of trading using opposite Commercial International and Misr National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International position performs unexpectedly, Misr 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 Misr National will offset losses from the drop in Misr National's long position.| Commercial International vs. Al Arafa Investment | Commercial International vs. Taaleem Management Services | Commercial International vs. Misr Oils Soap | Commercial International vs. Nile City Investment |
| Misr National vs. Paint Chemicals Industries | Misr National vs. Egyptians For Investment | Misr National vs. Misr Oils Soap | Misr National vs. Global Telecom Holding |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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