Correlation Between Ezz Steel and General Silos
Can any of the company-specific risk be diversified away by investing in both Ezz Steel and General Silos 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 Ezz Steel and General Silos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ezz Steel and General Silos Storage, you can compare the effects of market volatilities on Ezz Steel and General Silos 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 Ezz Steel with a short position of General Silos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ezz Steel and General Silos.
Diversification Opportunities for Ezz Steel and General Silos
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ezz and General is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ezz Steel and General Silos Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Silos Storage and Ezz Steel 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 Ezz Steel are associated (or correlated) with General Silos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Silos Storage has no effect on the direction of Ezz Steel i.e., Ezz Steel and General Silos go up and down completely randomly.
Pair Corralation between Ezz Steel and General Silos
Assuming the 90 days trading horizon Ezz Steel is expected to generate 0.61 times more return on investment than General Silos. However, Ezz Steel is 1.64 times less risky than General Silos. It trades about -0.16 of its potential returns per unit of risk. General Silos Storage is currently generating about -0.34 per unit of risk. If you would invest 11,500 in Ezz Steel on September 12, 2024 and sell it today you would lose (845.00) from holding Ezz Steel or give up 7.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ezz Steel vs. General Silos Storage
Performance |
| Timeline |
| Ezz Steel |
| General Silos Storage |
Ezz Steel and General Silos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ezz Steel and General Silos
The main advantage of trading using opposite Ezz Steel and General Silos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ezz Steel position performs unexpectedly, General Silos 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 General Silos will offset losses from the drop in General Silos' long position.| Ezz Steel vs. Paint Chemicals Industries | Ezz Steel vs. Reacap Financial Investments | Ezz Steel vs. Egyptians For Investment | Ezz Steel vs. Misr Oils Soap |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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