Correlation Between Copper For and Commercial International

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Can any of the company-specific risk be diversified away by investing in both Copper For and Commercial International 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 Copper For and Commercial International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copper For Commercial and Commercial International Bank Egypt, you can compare the effects of market volatilities on Copper For and Commercial International 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 Copper For with a short position of Commercial International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper For and Commercial International.

Diversification Opportunities for Copper For and Commercial International

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between Copper and Commercial is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Copper For Commercial and Commercial International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial International and Copper For 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 Copper For Commercial are associated (or correlated) with Commercial International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial International has no effect on the direction of Copper For i.e., Copper For and Commercial International go up and down completely randomly.

Pair Corralation between Copper For and Commercial International

Assuming the 90 days trading horizon Copper For Commercial is expected to generate 31.25 times more return on investment than Commercial International. However, Copper For is 31.25 times more volatile than Commercial International Bank Egypt. It trades about 0.07 of its potential returns per unit of risk. Commercial International Bank Egypt is currently generating about 0.05 per unit of risk. If you would invest  41.00  in Copper For Commercial on November 1, 2024 and sell it today you would earn a total of  1.00  from holding Copper For Commercial or generate 2.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.74%
ValuesDaily Returns

Copper For Commercial  vs.  Commercial International Bank

 Performance 
       Timeline  
Copper For Commercial 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Copper For Commercial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Commercial International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Commercial International Bank Egypt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Commercial International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Copper For and Commercial International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Copper For and Commercial International

The main advantage of trading using opposite Copper For and Commercial International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper For position performs unexpectedly, Commercial International 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 Commercial International will offset losses from the drop in Commercial International's long position.
The idea behind Copper For Commercial and Commercial International Bank Egypt 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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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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