Correlation Between Egyptian Financial and Juhayna Food
Can any of the company-specific risk be diversified away by investing in both Egyptian Financial and Juhayna Food 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 Juhayna Food 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 Juhayna Food Industries, you can compare the effects of market volatilities on Egyptian Financial and Juhayna Food 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 Juhayna Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Financial and Juhayna Food.
Diversification Opportunities for Egyptian Financial and Juhayna Food
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Egyptian and Juhayna is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Financial Industrial and Juhayna Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juhayna Food Industries 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 Juhayna Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juhayna Food Industries has no effect on the direction of Egyptian Financial i.e., Egyptian Financial and Juhayna Food go up and down completely randomly.
Pair Corralation between Egyptian Financial and Juhayna Food
Assuming the 90 days trading horizon Egyptian Financial Industrial is expected to generate 0.9 times more return on investment than Juhayna Food. However, Egyptian Financial Industrial is 1.11 times less risky than Juhayna Food. It trades about 0.13 of its potential returns per unit of risk. Juhayna Food Industries is currently generating about 0.1 per unit of risk. If you would invest 4,564 in Egyptian Financial Industrial on August 31, 2024 and sell it today you would earn a total of 10,223 from holding Egyptian Financial Industrial or generate 223.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptian Financial Industrial vs. Juhayna Food Industries
Performance |
| Timeline |
| Egyptian Financial |
| Juhayna Food Industries |
Egyptian Financial and Juhayna Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Financial and Juhayna Food
The main advantage of trading using opposite Egyptian Financial and Juhayna Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Financial position performs unexpectedly, Juhayna Food 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 Juhayna Food will offset losses from the drop in Juhayna Food's long position.| Egyptian Financial vs. Paint Chemicals Industries | Egyptian Financial vs. Reacap Financial Investments | Egyptian Financial vs. Egyptians For Investment | Egyptian Financial vs. Misr Oils Soap |
| Juhayna Food vs. Paint Chemicals Industries | Juhayna Food vs. Reacap Financial Investments | Juhayna Food vs. Egyptians For Investment | Juhayna Food vs. Misr Oils Soap |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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