Correlation Between Egyptian Financial and Natural Gas
Can any of the company-specific risk be diversified away by investing in both Egyptian Financial and Natural Gas 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 Natural Gas 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 Natural Gas Mining, you can compare the effects of market volatilities on Egyptian Financial and Natural Gas 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 Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Financial and Natural Gas.
Diversification Opportunities for Egyptian Financial and Natural Gas
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Egyptian and Natural is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Financial Industrial and Natural Gas Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Mining 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 Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Mining has no effect on the direction of Egyptian Financial i.e., Egyptian Financial and Natural Gas go up and down completely randomly.
Pair Corralation between Egyptian Financial and Natural Gas
Assuming the 90 days trading horizon Egyptian Financial is expected to generate 1.08 times less return on investment than Natural Gas. But when comparing it to its historical volatility, Egyptian Financial Industrial is 1.6 times less risky than Natural Gas. It trades about 0.17 of its potential returns per unit of risk. Natural Gas Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,672 in Natural Gas Mining on October 26, 2024 and sell it today you would earn a total of 1,358 from holding Natural Gas Mining or generate 50.82% 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. Natural Gas Mining
Performance |
| Timeline |
| Egyptian Financial |
| Natural Gas Mining |
Egyptian Financial and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Financial and Natural Gas
The main advantage of trading using opposite Egyptian Financial and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Financial position performs unexpectedly, Natural Gas 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 Natural Gas will offset losses from the drop in Natural Gas' long position.| Egyptian Financial vs. The United Bank | Egyptian Financial vs. Gadwa For Industrial | Egyptian Financial vs. Credit Agricole Egypt | Egyptian Financial vs. Industrial Engineering Projects |
| Natural Gas vs. Odin for Investment | Natural Gas vs. B Investments Holding | Natural Gas vs. ODIN Investments | Natural Gas vs. Industrial Engineering Projects |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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