Correlation Between Industrial Engineering and Medical Packaging
Can any of the company-specific risk be diversified away by investing in both Industrial Engineering and Medical Packaging 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 Industrial Engineering and Medical Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Engineering Projects and Medical Packaging, you can compare the effects of market volatilities on Industrial Engineering and Medical Packaging 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 Industrial Engineering with a short position of Medical Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Engineering and Medical Packaging.
Diversification Opportunities for Industrial Engineering and Medical Packaging
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Industrial and Medical is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Engineering Project and Medical Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Packaging and Industrial Engineering 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 Industrial Engineering Projects are associated (or correlated) with Medical Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Packaging has no effect on the direction of Industrial Engineering i.e., Industrial Engineering and Medical Packaging go up and down completely randomly.
Pair Corralation between Industrial Engineering and Medical Packaging
Assuming the 90 days trading horizon Industrial Engineering Projects is expected to generate 0.97 times more return on investment than Medical Packaging. However, Industrial Engineering Projects is 1.04 times less risky than Medical Packaging. It trades about -0.02 of its potential returns per unit of risk. Medical Packaging is currently generating about -0.04 per unit of risk. If you would invest 27.00 in Industrial Engineering Projects on September 12, 2024 and sell it today you would lose (1.00) from holding Industrial Engineering Projects or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.08% |
| Values | Daily Returns |
Industrial Engineering Project vs. Medical Packaging
Performance |
| Timeline |
| Industrial Engineering |
| Medical Packaging |
Industrial Engineering and Medical Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Engineering and Medical Packaging
The main advantage of trading using opposite Industrial Engineering and Medical Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Engineering position performs unexpectedly, Medical Packaging 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 Medical Packaging will offset losses from the drop in Medical Packaging's long position.| Industrial Engineering vs. Contact Financial Holding | Industrial Engineering vs. Housing Development Bank | Industrial Engineering vs. Mohandes Insurance | Industrial Engineering vs. Union National Bank |
| Medical Packaging vs. Orascom Financial Holding | Medical Packaging vs. Misr National Steel | Medical Packaging vs. Commercial International Bank Egypt | Medical Packaging vs. Fawry For Banking |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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