Correlation Between Export Development and Ismailia Misr
Can any of the company-specific risk be diversified away by investing in both Export Development and Ismailia Misr 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 Export Development and Ismailia Misr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Export Development Bank and Ismailia Misr Poultry, you can compare the effects of market volatilities on Export Development and Ismailia Misr 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 Export Development with a short position of Ismailia Misr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Export Development and Ismailia Misr.
Diversification Opportunities for Export Development and Ismailia Misr
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Export and Ismailia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Export Development Bank and Ismailia Misr Poultry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ismailia Misr Poultry and Export Development 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 Export Development Bank are associated (or correlated) with Ismailia Misr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ismailia Misr Poultry has no effect on the direction of Export Development i.e., Export Development and Ismailia Misr go up and down completely randomly.
Pair Corralation between Export Development and Ismailia Misr
Assuming the 90 days trading horizon Export Development is expected to generate 1.34 times less return on investment than Ismailia Misr. But when comparing it to its historical volatility, Export Development Bank is 1.09 times less risky than Ismailia Misr. It trades about 0.04 of its potential returns per unit of risk. Ismailia Misr Poultry is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 681.00 in Ismailia Misr Poultry on October 14, 2024 and sell it today you would earn a total of 332.00 from holding Ismailia Misr Poultry or generate 48.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Export Development Bank vs. Ismailia Misr Poultry
Performance |
| Timeline |
| Export Development Bank |
| Ismailia Misr Poultry |
Export Development and Ismailia Misr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Export Development and Ismailia Misr
The main advantage of trading using opposite Export Development and Ismailia Misr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Export Development position performs unexpectedly, Ismailia Misr 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 Ismailia Misr will offset losses from the drop in Ismailia Misr's long position.| Export Development vs. Paint Chemicals Industries | Export Development vs. Reacap Financial Investments | Export Development vs. Egyptians For Investment | Export Development vs. Misr Oils Soap |
| Ismailia Misr vs. Delta Construction Rebuilding | Ismailia Misr vs. Juhayna Food Industries | Ismailia Misr vs. Export Development Bank | Ismailia Misr vs. Paint Chemicals Industries |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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