Correlation Between Telecom Egypt and Export Development
Can any of the company-specific risk be diversified away by investing in both Telecom Egypt and Export Development 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 Telecom Egypt and Export Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Egypt and Export Development Bank, you can compare the effects of market volatilities on Telecom Egypt and Export Development 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 Telecom Egypt with a short position of Export Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Egypt and Export Development.
Diversification Opportunities for Telecom Egypt and Export Development
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telecom and Export is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Egypt and Export Development Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Export Development Bank and Telecom Egypt 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 Telecom Egypt are associated (or correlated) with Export Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Export Development Bank has no effect on the direction of Telecom Egypt i.e., Telecom Egypt and Export Development go up and down completely randomly.
Pair Corralation between Telecom Egypt and Export Development
Assuming the 90 days trading horizon Telecom Egypt is expected to generate 0.78 times more return on investment than Export Development. However, Telecom Egypt is 1.29 times less risky than Export Development. It trades about 0.13 of its potential returns per unit of risk. Export Development Bank is currently generating about -0.09 per unit of risk. If you would invest 3,240 in Telecom Egypt on September 24, 2024 and sell it today you would earn a total of 100.00 from holding Telecom Egypt or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Egypt vs. Export Development Bank
Performance |
| Timeline |
| Telecom Egypt |
| Export Development Bank |
Telecom Egypt and Export Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Egypt and Export Development
The main advantage of trading using opposite Telecom Egypt and Export Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Egypt position performs unexpectedly, Export Development 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 Export Development will offset losses from the drop in Export Development's long position.| Telecom Egypt vs. Memphis Pharmaceuticals | Telecom Egypt vs. Paint Chemicals Industries | Telecom Egypt vs. Egyptians For Investment | Telecom Egypt vs. Global Telecom Holding |
| Export Development vs. Memphis Pharmaceuticals | Export Development vs. Paint Chemicals Industries | Export Development vs. Egyptians For Investment | Export Development 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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