Correlation Between Egyptians For and Contact Financial
Can any of the company-specific risk be diversified away by investing in both Egyptians For and Contact 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 Egyptians For and Contact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egyptians For Investment and Contact Financial Holding, you can compare the effects of market volatilities on Egyptians For and Contact 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 Egyptians For with a short position of Contact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptians For and Contact Financial.
Diversification Opportunities for Egyptians For and Contact Financial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Egyptians and Contact is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Egyptians For Investment and Contact Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contact Financial Holding and Egyptians For 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 Egyptians For Investment are associated (or correlated) with Contact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contact Financial Holding has no effect on the direction of Egyptians For i.e., Egyptians For and Contact Financial go up and down completely randomly.
Pair Corralation between Egyptians For and Contact Financial
Assuming the 90 days trading horizon Egyptians For Investment is expected to generate 1.41 times more return on investment than Contact Financial. However, Egyptians For is 1.41 times more volatile than Contact Financial Holding. It trades about 0.01 of its potential returns per unit of risk. Contact Financial Holding is currently generating about -0.1 per unit of risk. If you would invest 25.00 in Egyptians For Investment on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Egyptians For Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptians For Investment vs. Contact Financial Holding
Performance |
| Timeline |
| Egyptians For Investment |
| Contact Financial Holding |
Egyptians For and Contact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptians For and Contact Financial
The main advantage of trading using opposite Egyptians For and Contact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptians For position performs unexpectedly, Contact 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 Contact Financial will offset losses from the drop in Contact Financial's long position.| Egyptians For vs. Al Khair River | Egyptians For vs. Union National Bank | Egyptians For vs. The Arab Dairy | Egyptians For vs. Copper For Commercial |
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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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