Correlation Between Egypt Aluminum and El Kahera
Can any of the company-specific risk be diversified away by investing in both Egypt Aluminum and El Kahera 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 Egypt Aluminum and El Kahera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egypt Aluminum and El Kahera El, you can compare the effects of market volatilities on Egypt Aluminum and El Kahera 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 Egypt Aluminum with a short position of El Kahera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egypt Aluminum and El Kahera.
Diversification Opportunities for Egypt Aluminum and El Kahera
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Egypt and KWIN is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Egypt Aluminum and El Kahera El in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Kahera El and Egypt Aluminum 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 Egypt Aluminum are associated (or correlated) with El Kahera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Kahera El has no effect on the direction of Egypt Aluminum i.e., Egypt Aluminum and El Kahera go up and down completely randomly.
Pair Corralation between Egypt Aluminum and El Kahera
Assuming the 90 days trading horizon Egypt Aluminum is expected to generate 1.27 times more return on investment than El Kahera. However, Egypt Aluminum is 1.27 times more volatile than El Kahera El. It trades about 0.1 of its potential returns per unit of risk. El Kahera El is currently generating about 0.1 per unit of risk. If you would invest 2,896 in Egypt Aluminum on August 27, 2024 and sell it today you would earn a total of 7,791 from holding Egypt Aluminum or generate 269.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egypt Aluminum vs. El Kahera El
Performance |
| Timeline |
| Egypt Aluminum |
| El Kahera El |
Egypt Aluminum and El Kahera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egypt Aluminum and El Kahera
The main advantage of trading using opposite Egypt Aluminum and El Kahera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egypt Aluminum position performs unexpectedly, El Kahera 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 El Kahera will offset losses from the drop in El Kahera's long position.| Egypt Aluminum vs. Paint Chemicals Industries | Egypt Aluminum vs. Egyptians For Investment | Egypt Aluminum vs. Misr Oils Soap | Egypt Aluminum vs. Global Telecom Holding |
| El Kahera vs. Ezz Steel | El Kahera vs. Dice Sport Casual | El Kahera vs. Orascom Construction PLC | El Kahera vs. El Nasr Clothes |
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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