Correlation Between Egyptian Transport and Natural Gas
Can any of the company-specific risk be diversified away by investing in both Egyptian Transport and Natural Gas 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 Egyptian Transport and Natural Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egyptian Transport and Natural Gas Mining, you can compare the effects of market volatilities on Egyptian Transport and Natural Gas 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 Egyptian Transport with a short position of Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Transport and Natural Gas.
Diversification Opportunities for Egyptian Transport and Natural Gas
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Egyptian and Natural is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Transport and Natural Gas Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Mining and Egyptian Transport 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 Egyptian Transport are associated (or correlated) with Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Mining has no effect on the direction of Egyptian Transport i.e., Egyptian Transport and Natural Gas go up and down completely randomly.
Pair Corralation between Egyptian Transport and Natural Gas
Assuming the 90 days trading horizon Egyptian Transport is expected to generate 5.51 times more return on investment than Natural Gas. However, Egyptian Transport is 5.51 times more volatile than Natural Gas Mining. It trades about 0.21 of its potential returns per unit of risk. Natural Gas Mining is currently generating about -0.62 per unit of risk. If you would invest 490.00 in Egyptian Transport on September 24, 2024 and sell it today you would earn a total of 85.00 from holding Egyptian Transport or generate 17.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptian Transport vs. Natural Gas Mining
Performance |
| Timeline |
| Egyptian Transport |
| Natural Gas Mining |
Egyptian Transport and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Transport and Natural Gas
The main advantage of trading using opposite Egyptian Transport and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Transport position performs unexpectedly, Natural Gas 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 Natural Gas will offset losses from the drop in Natural Gas' long position.| Egyptian Transport vs. Memphis Pharmaceuticals | Egyptian Transport vs. Paint Chemicals Industries | Egyptian Transport vs. Egyptians For Investment | Egyptian Transport vs. Global Telecom Holding |
| Natural Gas vs. Egyptian Transport | Natural Gas vs. Al Tawfeek Leasing | Natural Gas vs. Odin for Investment | Natural Gas vs. Cairo For Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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