Correlation Between Egyptians For and Reacap Financial
Can any of the company-specific risk be diversified away by investing in both Egyptians For 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 Egyptians For and Reacap 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 Reacap Financial Investments, you can compare the effects of market volatilities on Egyptians For 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 Egyptians For with a short position of Reacap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptians For and Reacap Financial.
Diversification Opportunities for Egyptians For and Reacap Financial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Egyptians and Reacap is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Egyptians For Investment 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 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 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 Egyptians For i.e., Egyptians For and Reacap Financial go up and down completely randomly.
Pair Corralation between Egyptians For and Reacap Financial
Assuming the 90 days trading horizon Egyptians For Investment is expected to generate 0.89 times more return on investment than Reacap Financial. However, Egyptians For Investment is 1.12 times less risky than Reacap Financial. It trades about 0.36 of its potential returns per unit of risk. Reacap Financial Investments is currently generating about -0.04 per unit of risk. If you would invest 21.00 in Egyptians For Investment on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Egyptians For Investment or generate 19.05% 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. Reacap Financial Investments
Performance |
| Timeline |
| Egyptians For Investment |
| Reacap Financial Inv |
Egyptians For and Reacap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptians For and Reacap Financial
The main advantage of trading using opposite Egyptians For and Reacap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptians For 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.| Egyptians For vs. Paint Chemicals Industries | Egyptians For vs. Misr Oils Soap | Egyptians For vs. Global Telecom Holding | Egyptians For vs. Al Tawfeek Leasing |
| Reacap Financial vs. Paint Chemicals Industries | Reacap Financial vs. Egyptians For Investment | Reacap Financial vs. Misr Oils Soap | Reacap Financial vs. Global Telecom 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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