Correlation Between Egyptian Financial and Contact Financial
Can any of the company-specific risk be diversified away by investing in both Egyptian Financial and Contact Financial 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 Contact Financial 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 Contact Financial Holding, you can compare the effects of market volatilities on Egyptian Financial and Contact Financial 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 Contact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Financial and Contact Financial.
Diversification Opportunities for Egyptian Financial and Contact Financial
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Egyptian and Contact is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Financial Industrial and Contact Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contact Financial Holding 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 Contact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contact Financial Holding has no effect on the direction of Egyptian Financial i.e., Egyptian Financial and Contact Financial go up and down completely randomly.
Pair Corralation between Egyptian Financial and Contact Financial
Assuming the 90 days trading horizon Egyptian Financial Industrial is expected to generate 0.97 times more return on investment than Contact Financial. However, Egyptian Financial Industrial is 1.03 times less risky than Contact Financial. It trades about 0.07 of its potential returns per unit of risk. Contact Financial Holding is currently generating about -0.22 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptian Financial Industrial vs. Contact Financial Holding
Performance |
| Timeline |
| Egyptian Financial |
| Contact Financial Holding |
Egyptian Financial and Contact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Financial and Contact Financial
The main advantage of trading using opposite Egyptian Financial and Contact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Financial position performs unexpectedly, Contact Financial 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 Contact Financial will offset losses from the drop in Contact Financial's long position.| Egyptian Financial vs. Cairo Oils Soap | Egyptian Financial vs. Egyptian Transport | Egyptian Financial vs. Faisal Islamic Bank | Egyptian Financial vs. Housing Development Bank |
| Contact Financial vs. Atlas For Investment | Contact Financial vs. Nile City Investment | Contact Financial vs. Grand Investment Capital | Contact Financial vs. Arab Aluminum |
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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