Correlation Between Commercial International and Paint Chemicals
Can any of the company-specific risk be diversified away by investing in both Commercial International and Paint Chemicals 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 Paint Chemicals 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 Paint Chemicals Industries, you can compare the effects of market volatilities on Commercial International and Paint Chemicals 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 Paint Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial International and Paint Chemicals.
Diversification Opportunities for Commercial International and Paint Chemicals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commercial and Paint is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank and Paint Chemicals Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paint Chemicals Indu 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 Paint Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paint Chemicals Indu has no effect on the direction of Commercial International i.e., Commercial International and Paint Chemicals go up and down completely randomly.
Pair Corralation between Commercial International and Paint Chemicals
If you would invest 3,980 in Paint Chemicals Industries on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Paint Chemicals Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial International Bank vs. Paint Chemicals Industries
Performance |
| Timeline |
| Commercial International |
| Paint Chemicals Indu |
Commercial International and Paint Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial International and Paint Chemicals
The main advantage of trading using opposite Commercial International and Paint Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International position performs unexpectedly, Paint Chemicals 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 Paint Chemicals will offset losses from the drop in Paint Chemicals' long position.The idea behind Commercial International Bank Egypt and Paint Chemicals Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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