Correlation Between Egyptian Gulf and Act Financial
Can any of the company-specific risk be diversified away by investing in both Egyptian Gulf and Act 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 Egyptian Gulf and Act Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egyptian Gulf Bank and Act Financial, you can compare the effects of market volatilities on Egyptian Gulf and Act 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 Egyptian Gulf with a short position of Act Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Gulf and Act Financial.
Diversification Opportunities for Egyptian Gulf and Act Financial
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Egyptian and Act is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Gulf Bank and Act Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Act Financial and Egyptian Gulf 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 Gulf Bank are associated (or correlated) with Act Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Act Financial has no effect on the direction of Egyptian Gulf i.e., Egyptian Gulf and Act Financial go up and down completely randomly.
Pair Corralation between Egyptian Gulf and Act Financial
Assuming the 90 days trading horizon Egyptian Gulf Bank is expected to generate 0.76 times more return on investment than Act Financial. However, Egyptian Gulf Bank is 1.32 times less risky than Act Financial. It trades about 0.0 of its potential returns per unit of risk. Act Financial is currently generating about -0.01 per unit of risk. If you would invest 29.00 in Egyptian Gulf Bank on October 26, 2024 and sell it today you would lose (1.00) from holding Egyptian Gulf Bank or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.04% |
| Values | Daily Returns |
Egyptian Gulf Bank vs. Act Financial
Performance |
| Timeline |
| Egyptian Gulf Bank |
| Act Financial |
Egyptian Gulf and Act Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Gulf and Act Financial
The main advantage of trading using opposite Egyptian Gulf and Act Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Gulf position performs unexpectedly, Act 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 Act Financial will offset losses from the drop in Act Financial's long position.| Egyptian Gulf vs. Contact Financial Holding | Egyptian Gulf vs. Arab Aluminum | Egyptian Gulf vs. QALA For Financial | Egyptian Gulf vs. Act Financial |
| Act Financial vs. Paint Chemicals Industries | Act Financial vs. Reacap Financial Investments | Act Financial vs. Egyptians For Investment | Act Financial 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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