Correlation Between Commercial International and Egypt Aluminum
Can any of the company-specific risk be diversified away by investing in both Commercial International and Egypt Aluminum 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 Egypt Aluminum 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 Egypt Aluminum, you can compare the effects of market volatilities on Commercial International and Egypt Aluminum 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 Egypt Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial International and Egypt Aluminum.
Diversification Opportunities for Commercial International and Egypt Aluminum
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Commercial and Egypt is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank and Egypt Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egypt Aluminum 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 Egypt Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egypt Aluminum has no effect on the direction of Commercial International i.e., Commercial International and Egypt Aluminum go up and down completely randomly.
Pair Corralation between Commercial International and Egypt Aluminum
Assuming the 90 days trading horizon Commercial International Bank Egypt is expected to under-perform the Egypt Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Commercial International Bank Egypt is 2.03 times less risky than Egypt Aluminum. The stock trades about -0.1 of its potential returns per unit of risk. The Egypt Aluminum is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11,140 in Egypt Aluminum on August 30, 2024 and sell it today you would earn a total of 130.00 from holding Egypt Aluminum or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial International Bank vs. Egypt Aluminum
Performance |
| Timeline |
| Commercial International |
| Egypt Aluminum |
Commercial International and Egypt Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial International and Egypt Aluminum
The main advantage of trading using opposite Commercial International and Egypt Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International position performs unexpectedly, Egypt Aluminum 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 Egypt Aluminum will offset losses from the drop in Egypt Aluminum'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 |
| Egypt Aluminum vs. Paint Chemicals Industries | Egypt Aluminum vs. Egyptians For Investment | Egypt Aluminum vs. Misr Oils Soap | Egypt Aluminum 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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