Correlation Between Ezz Steel and Speed Medical
Can any of the company-specific risk be diversified away by investing in both Ezz Steel and Speed Medical 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 Speed Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ezz Steel and Speed Medical, you can compare the effects of market volatilities on Ezz Steel and Speed Medical 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 Speed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ezz Steel and Speed Medical.
Diversification Opportunities for Ezz Steel and Speed Medical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ezz and Speed is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ezz Steel and Speed Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Speed Medical 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 Speed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Speed Medical has no effect on the direction of Ezz Steel i.e., Ezz Steel and Speed Medical go up and down completely randomly.
Pair Corralation between Ezz Steel and Speed Medical
Assuming the 90 days trading horizon Ezz Steel is expected to under-perform the Speed Medical. In addition to that, Ezz Steel is 1.21 times more volatile than Speed Medical. It trades about -0.19 of its total potential returns per unit of risk. Speed Medical is currently generating about -0.09 per unit of volatility. If you would invest 36.00 in Speed Medical on September 4, 2024 and sell it today you would lose (1.00) from holding Speed Medical or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Ezz Steel vs. Speed Medical
Performance |
| Timeline |
| Ezz Steel |
| Speed Medical |
Ezz Steel and Speed Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ezz Steel and Speed Medical
The main advantage of trading using opposite Ezz Steel and Speed Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ezz Steel position performs unexpectedly, Speed Medical 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 Speed Medical will offset losses from the drop in Speed Medical's long position.| Ezz Steel vs. Paint Chemicals Industries | Ezz Steel vs. Egyptians For Investment | Ezz Steel vs. Misr Oils Soap | Ezz Steel vs. Global Telecom Holding |
| Speed Medical vs. Dice Sport Casual | Speed Medical vs. Ezz Steel | Speed Medical vs. Egyptians For Investment | Speed Medical vs. Egypt Aluminum |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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