Correlation Between Egyptian Financial and Alexandria New
Can any of the company-specific risk be diversified away by investing in both Egyptian Financial and Alexandria New 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 Egyptian Financial and Alexandria New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egyptian Financial Industrial and Alexandria New Medical, you can compare the effects of market volatilities on Egyptian Financial and Alexandria New 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 Egyptian Financial with a short position of Alexandria New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Financial and Alexandria New.
Diversification Opportunities for Egyptian Financial and Alexandria New
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Egyptian and Alexandria is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Financial Industrial and Alexandria New Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria New Medical and Egyptian Financial 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 Egyptian Financial Industrial are associated (or correlated) with Alexandria New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria New Medical has no effect on the direction of Egyptian Financial i.e., Egyptian Financial and Alexandria New go up and down completely randomly.
Pair Corralation between Egyptian Financial and Alexandria New
Assuming the 90 days trading horizon Egyptian Financial Industrial is expected to generate 1.04 times more return on investment than Alexandria New. However, Egyptian Financial is 1.04 times more volatile than Alexandria New Medical. It trades about 0.07 of its potential returns per unit of risk. Alexandria New Medical is currently generating about -0.12 per unit of risk. If you would invest 15,680 in Egyptian Financial Industrial on November 5, 2024 and sell it today you would earn a total of 269.00 from holding Egyptian Financial Industrial or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptian Financial Industrial vs. Alexandria New Medical
Performance |
| Timeline |
| Egyptian Financial |
| Alexandria New Medical |
Egyptian Financial and Alexandria New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Financial and Alexandria New
The main advantage of trading using opposite Egyptian Financial and Alexandria New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Financial position performs unexpectedly, Alexandria New 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 Alexandria New will offset losses from the drop in Alexandria New's long position.| Egyptian Financial vs. Mohandes Insurance | Egyptian Financial vs. The Arab Dairy | Egyptian Financial vs. Misr Chemical Industries | Egyptian Financial vs. B Investments Holding |
| Alexandria New vs. AJWA for Food | Alexandria New vs. Edita Food Industries | Alexandria New vs. Egyptian Iron Steel | Alexandria New vs. Misr Hotels |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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