Correlation Between Egyptian Gulf and Commercial International
Can any of the company-specific risk be diversified away by investing in both Egyptian Gulf and Commercial International 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 Commercial International 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 Commercial International Bank Egypt, you can compare the effects of market volatilities on Egyptian Gulf and Commercial International 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 Commercial International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Gulf and Commercial International.
Diversification Opportunities for Egyptian Gulf and Commercial International
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Egyptian and Commercial is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Gulf Bank and Commercial International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial International 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 Commercial International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial International has no effect on the direction of Egyptian Gulf i.e., Egyptian Gulf and Commercial International go up and down completely randomly.
Pair Corralation between Egyptian Gulf and Commercial International
Assuming the 90 days trading horizon Egyptian Gulf Bank is expected to generate 1.08 times more return on investment than Commercial International. However, Egyptian Gulf is 1.08 times more volatile than Commercial International Bank Egypt. It trades about 0.15 of its potential returns per unit of risk. Commercial International Bank Egypt is currently generating about -0.06 per unit of risk. If you would invest 27.00 in Egyptian Gulf Bank on November 7, 2024 and sell it today you would earn a total of 1.00 from holding Egyptian Gulf Bank or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
Egyptian Gulf Bank vs. Commercial International Bank
Performance |
| Timeline |
| Egyptian Gulf Bank |
| Commercial International |
Egyptian Gulf and Commercial International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Gulf and Commercial International
The main advantage of trading using opposite Egyptian Gulf and Commercial International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Gulf position performs unexpectedly, Commercial International 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 Commercial International will offset losses from the drop in Commercial International's long position.| Egyptian Gulf vs. ODIN Investments | Egyptian Gulf vs. Egyptians For Investment | Egyptian Gulf vs. Reacap Financial Investments | Egyptian Gulf vs. Orascom Investment Holding |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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