Correlation Between Juhayna Food and Egyptian Chemical
Can any of the company-specific risk be diversified away by investing in both Juhayna Food 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 Juhayna Food and Egyptian Chemical 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 Egyptian Chemical Industries, you can compare the effects of market volatilities on Juhayna Food 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 Juhayna Food with a short position of Egyptian Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juhayna Food and Egyptian Chemical.
Diversification Opportunities for Juhayna Food and Egyptian Chemical
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Juhayna and Egyptian is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Juhayna Food Industries and Egyptian Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Chemical 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 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 Juhayna Food i.e., Juhayna Food and Egyptian Chemical go up and down completely randomly.
Pair Corralation between Juhayna Food and Egyptian Chemical
Assuming the 90 days trading horizon Juhayna Food Industries is expected to under-perform the Egyptian Chemical. In addition to that, Juhayna Food is 1.63 times more volatile than Egyptian Chemical Industries. It trades about -0.39 of its total potential returns per unit of risk. Egyptian Chemical Industries is currently generating about -0.26 per unit of volatility. If you would invest 821.00 in Egyptian Chemical Industries on September 19, 2024 and sell it today you would lose (50.00) from holding Egyptian Chemical Industries or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Juhayna Food Industries vs. Egyptian Chemical Industries
Performance |
| Timeline |
| Juhayna Food Industries |
| Egyptian Chemical |
Juhayna Food and Egyptian Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juhayna Food and Egyptian Chemical
The main advantage of trading using opposite Juhayna Food and Egyptian Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juhayna Food 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.| Juhayna Food vs. Paint Chemicals Industries | Juhayna Food vs. Reacap Financial Investments | Juhayna Food vs. Egyptians For Investment | Juhayna Food vs. Misr Oils Soap |
| Egyptian Chemical vs. Paint Chemicals Industries | Egyptian Chemical vs. Reacap Financial Investments | Egyptian Chemical vs. Egyptians For Investment | Egyptian Chemical vs. Misr Oils Soap |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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