Correlation Between Arabian Food and EGX 33
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By analyzing existing cross correlation between Arabian Food Industries and EGX 33 Shariah, you can compare the effects of market volatilities on Arabian Food and EGX 33 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 Arabian Food with a short position of EGX 33. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arabian Food and EGX 33.
Diversification Opportunities for Arabian Food and EGX 33
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Arabian and EGX is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Arabian Food Industries and EGX 33 Shariah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGX 33 Shariah and Arabian Food 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 Arabian Food Industries are associated (or correlated) with EGX 33. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGX 33 Shariah has no effect on the direction of Arabian Food i.e., Arabian Food and EGX 33 go up and down completely randomly.
Pair Corralation between Arabian Food and EGX 33
Assuming the 90 days trading horizon Arabian Food Industries is expected to generate 3.86 times more return on investment than EGX 33. However, Arabian Food is 3.86 times more volatile than EGX 33 Shariah. It trades about 0.37 of its potential returns per unit of risk. EGX 33 Shariah is currently generating about 0.09 per unit of risk. If you would invest 1,113 in Arabian Food Industries on September 2, 2024 and sell it today you would earn a total of 1,587 from holding Arabian Food Industries or generate 142.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arabian Food Industries vs. EGX 33 Shariah
Performance |
| Timeline |
Arabian Food and EGX 33 Volatility Contrast
Predicted Return Density |
| Returns |
Arabian Food Industries
Pair trading matchups for Arabian Food
EGX 33 Shariah
Pair trading matchups for EGX 33
Pair Trading with Arabian Food and EGX 33
The main advantage of trading using opposite Arabian Food and EGX 33 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arabian Food position performs unexpectedly, EGX 33 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 EGX 33 will offset losses from the drop in EGX 33's long position.| Arabian Food vs. Egyptians For Investment | Arabian Food vs. Misr Oils Soap | Arabian Food vs. Global Telecom Holding | Arabian Food vs. Qatar Natl Bank |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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