Correlation Between Copper For and Ezz Steel
Can any of the company-specific risk be diversified away by investing in both Copper For and Ezz Steel 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 Ezz Steel 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 Ezz Steel, you can compare the effects of market volatilities on Copper For and Ezz Steel 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 Ezz Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper For and Ezz Steel.
Diversification Opportunities for Copper For and Ezz Steel
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Copper and Ezz is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Copper For Commercial and Ezz Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ezz Steel 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 Ezz Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ezz Steel has no effect on the direction of Copper For i.e., Copper For and Ezz Steel go up and down completely randomly.
Pair Corralation between Copper For and Ezz Steel
Assuming the 90 days trading horizon Copper For Commercial is expected to under-perform the Ezz Steel. In addition to that, Copper For is 1.49 times more volatile than Ezz Steel. It trades about -0.43 of its total potential returns per unit of risk. Ezz Steel is currently generating about -0.19 per unit of volatility. If you would invest 11,126 in Ezz Steel on September 4, 2024 and sell it today you would lose (846.00) from holding Ezz Steel or give up 7.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Copper For Commercial vs. Ezz Steel
Performance |
| Timeline |
| Copper For Commercial |
| Ezz Steel |
Copper For and Ezz Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper For and Ezz Steel
The main advantage of trading using opposite Copper For and Ezz Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper For position performs unexpectedly, Ezz Steel 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 Ezz Steel will offset losses from the drop in Ezz Steel's long position.| Copper For vs. Nile City Investment | Copper For vs. Atlas For Investment | Copper For vs. Al Arafa Investment | Copper For vs. Reacap Financial Investments |
| Ezz Steel vs. Paint Chemicals Industries | Ezz Steel vs. Egyptians For Investment | Ezz Steel vs. Misr Oils Soap | Ezz Steel 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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