Correlation Between Egyptian Transport and El Nasr
Can any of the company-specific risk be diversified away by investing in both Egyptian Transport and El Nasr 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 El Nasr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egyptian Transport and El Nasr Clothes, you can compare the effects of market volatilities on Egyptian Transport and El Nasr 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 El Nasr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Transport and El Nasr.
Diversification Opportunities for Egyptian Transport and El Nasr
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Egyptian and KABO is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Transport and El Nasr Clothes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Nasr Clothes 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 El Nasr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Nasr Clothes has no effect on the direction of Egyptian Transport i.e., Egyptian Transport and El Nasr go up and down completely randomly.
Pair Corralation between Egyptian Transport and El Nasr
Assuming the 90 days trading horizon Egyptian Transport is expected to generate 1.36 times less return on investment than El Nasr. In addition to that, Egyptian Transport is 1.03 times more volatile than El Nasr Clothes. It trades about 0.26 of its total potential returns per unit of risk. El Nasr Clothes is currently generating about 0.36 per unit of volatility. If you would invest 289.00 in El Nasr Clothes on September 13, 2024 and sell it today you would earn a total of 102.00 from holding El Nasr Clothes or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptian Transport vs. El Nasr Clothes
Performance |
| Timeline |
| Egyptian Transport |
| El Nasr Clothes |
Egyptian Transport and El Nasr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Transport and El Nasr
The main advantage of trading using opposite Egyptian Transport and El Nasr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Transport position performs unexpectedly, El Nasr 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 El Nasr will offset losses from the drop in El Nasr's long position.| Egyptian Transport vs. Paint Chemicals Industries | Egyptian Transport vs. Reacap Financial Investments | Egyptian Transport vs. Egyptians For Investment | Egyptian Transport vs. Misr Oils Soap |
| El Nasr vs. Act Financial | El Nasr vs. Arab Moltaka Investments | El Nasr vs. Egyptian Gulf Bank | El Nasr vs. Odin 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |