Correlation Between Housing Development and Ismailia Development
Can any of the company-specific risk be diversified away by investing in both Housing Development and Ismailia Development 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 Housing Development and Ismailia Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Housing Development Bank and Ismailia Development and, you can compare the effects of market volatilities on Housing Development and Ismailia Development 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 Housing Development with a short position of Ismailia Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Housing Development and Ismailia Development.
Diversification Opportunities for Housing Development and Ismailia Development
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Housing and Ismailia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Housing Development Bank and Ismailia Development and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ismailia Development and and Housing 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 Housing Development Bank are associated (or correlated) with Ismailia Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ismailia Development and has no effect on the direction of Housing Development i.e., Housing Development and Ismailia Development go up and down completely randomly.
Pair Corralation between Housing Development and Ismailia Development
Assuming the 90 days trading horizon Housing Development Bank is expected to generate 0.83 times more return on investment than Ismailia Development. However, Housing Development Bank is 1.2 times less risky than Ismailia Development. It trades about 0.07 of its potential returns per unit of risk. Ismailia Development and is currently generating about -0.2 per unit of risk. If you would invest 3,985 in Housing Development Bank on September 14, 2024 and sell it today you would earn a total of 1,272 from holding Housing Development Bank or generate 31.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Housing Development Bank vs. Ismailia Development and
Performance |
| Timeline |
| Housing Development Bank |
| Ismailia Development and |
Housing Development and Ismailia Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Housing Development and Ismailia Development
The main advantage of trading using opposite Housing Development and Ismailia Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Housing Development position performs unexpectedly, Ismailia Development 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 Development will offset losses from the drop in Ismailia Development's long position.| Housing Development vs. Paint Chemicals Industries | Housing Development vs. Reacap Financial Investments | Housing Development vs. Egyptians For Investment | Housing Development vs. Misr Oils Soap |
| Ismailia Development vs. Sharkia National Food | Ismailia Development vs. Misr Hotels | Ismailia Development vs. AJWA for Food | Ismailia Development vs. Orascom Investment 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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