Correlation Between Telecom Egypt and Medical Packaging
Can any of the company-specific risk be diversified away by investing in both Telecom Egypt and Medical Packaging 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 Medical Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Egypt and Medical Packaging, you can compare the effects of market volatilities on Telecom Egypt and Medical Packaging 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 Medical Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Egypt and Medical Packaging.
Diversification Opportunities for Telecom Egypt and Medical Packaging
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Telecom and Medical is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Egypt and Medical Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Packaging 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 Medical Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Packaging has no effect on the direction of Telecom Egypt i.e., Telecom Egypt and Medical Packaging go up and down completely randomly.
Pair Corralation between Telecom Egypt and Medical Packaging
Assuming the 90 days trading horizon Telecom Egypt is expected to generate 0.44 times more return on investment than Medical Packaging. However, Telecom Egypt is 2.27 times less risky than Medical Packaging. It trades about 0.13 of its potential returns per unit of risk. Medical Packaging is currently generating about 0.05 per unit of risk. If you would invest 3,420 in Telecom Egypt on October 12, 2024 and sell it today you would earn a total of 101.00 from holding Telecom Egypt or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Telecom Egypt vs. Medical Packaging
Performance |
| Timeline |
| Telecom Egypt |
| Medical Packaging |
Telecom Egypt and Medical Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Egypt and Medical Packaging
The main advantage of trading using opposite Telecom Egypt and Medical Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Egypt position performs unexpectedly, Medical Packaging 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 Medical Packaging will offset losses from the drop in Medical Packaging's long position.| Telecom Egypt vs. Copper For Commercial | Telecom Egypt vs. Reacap Financial Investments | Telecom Egypt vs. Saudi Egyptian Investment | Telecom Egypt vs. Mohandes Insurance |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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