Correlation Between Juhayna Food and Egypt Aluminum
Can any of the company-specific risk be diversified away by investing in both Juhayna Food and Egypt Aluminum 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 Juhayna Food and Egypt Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juhayna Food Industries and Egypt Aluminum, you can compare the effects of market volatilities on Juhayna Food and Egypt Aluminum 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 Juhayna Food with a short position of Egypt Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juhayna Food and Egypt Aluminum.
Diversification Opportunities for Juhayna Food and Egypt Aluminum
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Juhayna and Egypt is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Juhayna Food Industries and Egypt Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egypt Aluminum and Juhayna Food 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 Juhayna Food Industries are associated (or correlated) with Egypt Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egypt Aluminum has no effect on the direction of Juhayna Food i.e., Juhayna Food and Egypt Aluminum go up and down completely randomly.
Pair Corralation between Juhayna Food and Egypt Aluminum
Assuming the 90 days trading horizon Juhayna Food Industries is expected to under-perform the Egypt Aluminum. In addition to that, Juhayna Food is 1.0 times more volatile than Egypt Aluminum. It trades about -0.39 of its total potential returns per unit of risk. Egypt Aluminum is currently generating about 0.09 per unit of volatility. If you would invest 11,300 in Egypt Aluminum on September 19, 2024 and sell it today you would earn a total of 360.00 from holding Egypt Aluminum or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Juhayna Food Industries vs. Egypt Aluminum
Performance |
| Timeline |
| Juhayna Food Industries |
| Egypt Aluminum |
Juhayna Food and Egypt Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juhayna Food and Egypt Aluminum
The main advantage of trading using opposite Juhayna Food and Egypt Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juhayna Food position performs unexpectedly, Egypt Aluminum 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 Egypt Aluminum will offset losses from the drop in Egypt Aluminum's long position.| Juhayna Food vs. Paint Chemicals Industries | Juhayna Food vs. Reacap Financial Investments | Juhayna Food vs. Egyptians For Investment | Juhayna Food vs. Misr Oils Soap |
| Egypt Aluminum vs. Zahraa Maadi Investment | Egypt Aluminum vs. Saudi Egyptian Investment | Egypt Aluminum vs. Atlas For Investment | Egypt Aluminum vs. Misr Financial Investments |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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