Correlation Between Egyptian Gulf and Reacap Financial
Can any of the company-specific risk be diversified away by investing in both Egyptian Gulf and Reacap 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 Reacap 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 Reacap Financial Investments, you can compare the effects of market volatilities on Egyptian Gulf and Reacap 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 Reacap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Gulf and Reacap Financial.
Diversification Opportunities for Egyptian Gulf and Reacap Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Egyptian and Reacap is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Gulf Bank and Reacap Financial Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reacap Financial Inv 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 Reacap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reacap Financial Inv has no effect on the direction of Egyptian Gulf i.e., Egyptian Gulf and Reacap Financial go up and down completely randomly.
Pair Corralation between Egyptian Gulf and Reacap Financial
Assuming the 90 days trading horizon Egyptian Gulf Bank is expected to generate 0.55 times more return on investment than Reacap Financial. However, Egyptian Gulf Bank is 1.81 times less risky than Reacap Financial. It trades about 0.25 of its potential returns per unit of risk. Reacap Financial Investments is currently generating about 0.06 per unit of risk. If you would invest 27.00 in Egyptian Gulf Bank on October 24, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptian Gulf Bank vs. Reacap Financial Investments
Performance |
| Timeline |
| Egyptian Gulf Bank |
| Reacap Financial Inv |
Egyptian Gulf and Reacap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Gulf and Reacap Financial
The main advantage of trading using opposite Egyptian Gulf and Reacap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Gulf position performs unexpectedly, Reacap 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 Reacap Financial will offset losses from the drop in Reacap Financial's long position.| Egyptian Gulf vs. Housing Development Bank | Egyptian Gulf vs. National Bank | Egyptian Gulf vs. Natural Gas Mining | Egyptian Gulf vs. Mohandes Insurance |
| Reacap Financial vs. Egyptian Media Production | Reacap Financial vs. Delta Insurance | Reacap Financial vs. Housing Development Bank | Reacap Financial vs. Credit Agricole Egypt |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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