Correlation Between Egyptians For and Al Khair
Can any of the company-specific risk be diversified away by investing in both Egyptians For and Al Khair 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 Al Khair 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 Al Khair River, you can compare the effects of market volatilities on Egyptians For and Al Khair 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 Al Khair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptians For and Al Khair.
Diversification Opportunities for Egyptians For and Al Khair
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Egyptians and KRDI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Egyptians For Investment and Al Khair River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Khair River 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 Al Khair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Khair River has no effect on the direction of Egyptians For i.e., Egyptians For and Al Khair go up and down completely randomly.
Pair Corralation between Egyptians For and Al Khair
Assuming the 90 days trading horizon Egyptians For is expected to generate 5.78 times less return on investment than Al Khair. In addition to that, Egyptians For is 1.06 times more volatile than Al Khair River. It trades about 0.01 of its total potential returns per unit of risk. Al Khair River is currently generating about 0.09 per unit of volatility. If you would invest 56.00 in Al Khair River on October 26, 2024 and sell it today you would earn a total of 4.00 from holding Al Khair River or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptians For Investment vs. Al Khair River
Performance |
| Timeline |
| Egyptians For Investment |
| Al Khair River |
Egyptians For and Al Khair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptians For and Al Khair
The main advantage of trading using opposite Egyptians For and Al Khair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptians For position performs unexpectedly, Al Khair 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 Al Khair will offset losses from the drop in Al Khair'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 |
| Al Khair vs. Paint Chemicals Industries | Al Khair vs. Reacap Financial Investments | Al Khair vs. Egyptians For Investment | Al Khair 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 CEOs Directory module to screen CEOs from public companies around the world.
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