Correlation Between General Silos and Egyptian Chemical
Can any of the company-specific risk be diversified away by investing in both General Silos and Egyptian Chemical 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 Egyptian Chemical 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 Egyptian Chemical Industries, you can compare the effects of market volatilities on General Silos and Egyptian Chemical 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 Egyptian Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Silos and Egyptian Chemical.
Diversification Opportunities for General Silos and Egyptian Chemical
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and Egyptian is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding General Silos Storage and Egyptian Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Chemical 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 Egyptian Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Chemical has no effect on the direction of General Silos i.e., General Silos and Egyptian Chemical go up and down completely randomly.
Pair Corralation between General Silos and Egyptian Chemical
Assuming the 90 days trading horizon General Silos Storage is expected to generate 1.46 times more return on investment than Egyptian Chemical. However, General Silos is 1.46 times more volatile than Egyptian Chemical Industries. It trades about 0.05 of its potential returns per unit of risk. Egyptian Chemical Industries is currently generating about 0.03 per unit of risk. If you would invest 12,754 in General Silos Storage on September 4, 2024 and sell it today you would earn a total of 7,079 from holding General Silos Storage or generate 55.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Silos Storage vs. Egyptian Chemical Industries
Performance |
| Timeline |
| General Silos Storage |
| Egyptian Chemical |
General Silos and Egyptian Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Silos and Egyptian Chemical
The main advantage of trading using opposite General Silos and Egyptian Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Silos position performs unexpectedly, Egyptian Chemical 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 Egyptian Chemical will offset losses from the drop in Egyptian Chemical's 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 |
| Egyptian Chemical vs. Paint Chemicals Industries | Egyptian Chemical vs. Egyptians For Investment | Egyptian Chemical vs. Misr Oils Soap | Egyptian Chemical 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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