Correlation Between Egyptian Financial and Fawry For
Can any of the company-specific risk be diversified away by investing in both Egyptian Financial and Fawry For 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 Fawry For 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 Fawry For Banking, you can compare the effects of market volatilities on Egyptian Financial and Fawry For 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 Fawry For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Financial and Fawry For.
Diversification Opportunities for Egyptian Financial and Fawry For
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Egyptian and Fawry is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Financial Industrial and Fawry For Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fawry For Banking 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 Fawry For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fawry For Banking has no effect on the direction of Egyptian Financial i.e., Egyptian Financial and Fawry For go up and down completely randomly.
Pair Corralation between Egyptian Financial and Fawry For
Assuming the 90 days trading horizon Egyptian Financial Industrial is expected to generate 1.87 times more return on investment than Fawry For. However, Egyptian Financial is 1.87 times more volatile than Fawry For Banking. It trades about 0.24 of its potential returns per unit of risk. Fawry For Banking is currently generating about -0.02 per unit of risk. If you would invest 11,427 in Egyptian Financial Industrial on August 27, 2024 and sell it today you would earn a total of 3,659 from holding Egyptian Financial Industrial or generate 32.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptian Financial Industrial vs. Fawry For Banking
Performance |
| Timeline |
| Egyptian Financial |
| Fawry For Banking |
Egyptian Financial and Fawry For Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Financial and Fawry For
The main advantage of trading using opposite Egyptian Financial and Fawry For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Financial position performs unexpectedly, Fawry For 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 Fawry For will offset losses from the drop in Fawry For's long position.| Egyptian Financial vs. Paint Chemicals Industries | Egyptian Financial vs. Egyptians For Investment | Egyptian Financial vs. Misr Oils Soap | Egyptian Financial vs. Global Telecom Holding |
| Fawry For vs. Cairo For Investment | Fawry For vs. Reacap Financial Investments | Fawry For vs. Copper For Commercial | Fawry For vs. Al Khair River |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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