Correlation Between Natural Gas and Egyptian Financial
Can any of the company-specific risk be diversified away by investing in both Natural Gas and Egyptian 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 Natural Gas and Egyptian Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Gas Mining and Egyptian Financial Industrial, you can compare the effects of market volatilities on Natural Gas and Egyptian 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 Natural Gas with a short position of Egyptian Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and Egyptian Financial.
Diversification Opportunities for Natural Gas and Egyptian Financial
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Egyptian is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Mining and Egyptian Financial Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Financial and Natural Gas 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 Natural Gas Mining are associated (or correlated) with Egyptian Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Financial has no effect on the direction of Natural Gas i.e., Natural Gas and Egyptian Financial go up and down completely randomly.
Pair Corralation between Natural Gas and Egyptian Financial
Assuming the 90 days trading horizon Natural Gas Mining is expected to generate 1.6 times more return on investment than Egyptian Financial. However, Natural Gas is 1.6 times more volatile than Egyptian Financial Industrial. It trades about 0.11 of its potential returns per unit of risk. Egyptian Financial Industrial is currently generating about 0.17 per unit of risk. 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 |
Natural Gas Mining vs. Egyptian Financial Industrial
Performance |
| Timeline |
| Natural Gas Mining |
| Egyptian Financial |
Natural Gas and Egyptian Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Gas and Egyptian Financial
The main advantage of trading using opposite Natural Gas and Egyptian Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, Egyptian 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 Egyptian Financial will offset losses from the drop in Egyptian Financial's long position.| Natural Gas vs. Odin for Investment | Natural Gas vs. B Investments Holding | Natural Gas vs. ODIN Investments | Natural Gas vs. Industrial Engineering Projects |
| Egyptian Financial vs. The United Bank | Egyptian Financial vs. Gadwa For Industrial | Egyptian Financial vs. Credit Agricole Egypt | Egyptian Financial 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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