Correlation Between General Silos and B Investments
Can any of the company-specific risk be diversified away by investing in both General Silos and B Investments 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 General Silos and B Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Silos Storage and B Investments Holding, you can compare the effects of market volatilities on General Silos and B Investments 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 General Silos with a short position of B Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Silos and B Investments.
Diversification Opportunities for General Silos and B Investments
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between General and BINV is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Silos Storage and B Investments Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Investments Holding and General Silos 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 General Silos Storage are associated (or correlated) with B Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Investments Holding has no effect on the direction of General Silos i.e., General Silos and B Investments go up and down completely randomly.
Pair Corralation between General Silos and B Investments
Assuming the 90 days trading horizon General Silos Storage is expected to under-perform the B Investments. In addition to that, General Silos is 2.57 times more volatile than B Investments Holding. It trades about -0.2 of its total potential returns per unit of risk. B Investments Holding is currently generating about -0.05 per unit of volatility. If you would invest 2,530 in B Investments Holding on September 4, 2024 and sell it today you would lose (48.00) from holding B Investments Holding or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Silos Storage vs. B Investments Holding
Performance |
| Timeline |
| General Silos Storage |
| B Investments Holding |
General Silos and B Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Silos and B Investments
The main advantage of trading using opposite General Silos and B Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Silos position performs unexpectedly, B Investments 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 B Investments will offset losses from the drop in B Investments' long position.| General Silos vs. Arab Moltaka Investments | General Silos vs. Ezz Steel | General Silos vs. Nozha International Hospital | General Silos vs. Arabian Food Industries |
| B Investments vs. Paint Chemicals Industries | B Investments vs. Egyptians For Investment | B Investments vs. Misr Oils Soap | B Investments 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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