Correlation Between Telecom Egypt and Nozha International
Can any of the company-specific risk be diversified away by investing in both Telecom Egypt and Nozha International 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 Nozha International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Egypt and Nozha International Hospital, you can compare the effects of market volatilities on Telecom Egypt and Nozha International 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 Nozha International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Egypt and Nozha International.
Diversification Opportunities for Telecom Egypt and Nozha International
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Telecom and Nozha is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Egypt and Nozha International Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nozha International 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 Nozha International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nozha International has no effect on the direction of Telecom Egypt i.e., Telecom Egypt and Nozha International go up and down completely randomly.
Pair Corralation between Telecom Egypt and Nozha International
Assuming the 90 days trading horizon Telecom Egypt is expected to under-perform the Nozha International. But the stock apears to be less risky and, when comparing its historical volatility, Telecom Egypt is 1.6 times less risky than Nozha International. The stock trades about 0.0 of its potential returns per unit of risk. The Nozha International Hospital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 811.00 in Nozha International Hospital on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Nozha International Hospital or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Egypt vs. Nozha International Hospital
Performance |
| Timeline |
| Telecom Egypt |
| Nozha International |
Telecom Egypt and Nozha International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Egypt and Nozha International
The main advantage of trading using opposite Telecom Egypt and Nozha International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Egypt position performs unexpectedly, Nozha International 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 Nozha International will offset losses from the drop in Nozha International's long position.| Telecom Egypt vs. Paint Chemicals Industries | Telecom Egypt vs. Egyptians For Investment | Telecom Egypt vs. Misr Oils Soap | Telecom Egypt vs. Global Telecom Holding |
| Nozha International vs. Paint Chemicals Industries | Nozha International vs. Egyptians For Investment | Nozha International vs. Misr Oils Soap | Nozha International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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