Correlation Between Egyptian Iron and Speed Medical
Can any of the company-specific risk be diversified away by investing in both Egyptian Iron and Speed Medical 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 Egyptian Iron and Speed Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egyptian Iron Steel and Speed Medical, you can compare the effects of market volatilities on Egyptian Iron and Speed Medical 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 Egyptian Iron with a short position of Speed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Iron and Speed Medical.
Diversification Opportunities for Egyptian Iron and Speed Medical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Egyptian and Speed is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Iron Steel and Speed Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Speed Medical and Egyptian Iron 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 Egyptian Iron Steel are associated (or correlated) with Speed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Speed Medical has no effect on the direction of Egyptian Iron i.e., Egyptian Iron and Speed Medical go up and down completely randomly.
Pair Corralation between Egyptian Iron and Speed Medical
Assuming the 90 days trading horizon Egyptian Iron Steel is expected to under-perform the Speed Medical. In addition to that, Egyptian Iron is 1.24 times more volatile than Speed Medical. It trades about -0.16 of its total potential returns per unit of risk. Speed Medical is currently generating about 0.01 per unit of volatility. If you would invest 37.00 in Speed Medical on September 24, 2024 and sell it today you would earn a total of 0.00 from holding Speed Medical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptian Iron Steel vs. Speed Medical
Performance |
| Timeline |
| Egyptian Iron Steel |
| Speed Medical |
Egyptian Iron and Speed Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Iron and Speed Medical
The main advantage of trading using opposite Egyptian Iron and Speed Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Iron position performs unexpectedly, Speed Medical 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 Speed Medical will offset losses from the drop in Speed Medical's long position.| Egyptian Iron vs. Memphis Pharmaceuticals | Egyptian Iron vs. Paint Chemicals Industries | Egyptian Iron vs. Egyptians For Investment | Egyptian Iron vs. Global Telecom Holding |
| Speed Medical vs. Memphis Pharmaceuticals | Speed Medical vs. Paint Chemicals Industries | Speed Medical vs. Egyptians For Investment | Speed Medical 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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