Correlation Between El Nasr and Egypt Aluminum
Can any of the company-specific risk be diversified away by investing in both El Nasr 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 El Nasr and Egypt Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Nasr Clothes and Egypt Aluminum, you can compare the effects of market volatilities on El Nasr 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 El Nasr with a short position of Egypt Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Nasr and Egypt Aluminum.
Diversification Opportunities for El Nasr and Egypt Aluminum
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between KABO and Egypt is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding El Nasr Clothes and Egypt Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egypt Aluminum and El Nasr 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 El Nasr Clothes 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 El Nasr i.e., El Nasr and Egypt Aluminum go up and down completely randomly.
Pair Corralation between El Nasr and Egypt Aluminum
Assuming the 90 days trading horizon El Nasr Clothes is expected to generate 2.28 times more return on investment than Egypt Aluminum. However, El Nasr is 2.28 times more volatile than Egypt Aluminum. It trades about 0.37 of its potential returns per unit of risk. Egypt Aluminum is currently generating about 0.09 per unit of risk. If you would invest 282.00 in El Nasr Clothes on September 19, 2024 and sell it today you would earn a total of 97.00 from holding El Nasr Clothes or generate 34.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Nasr Clothes vs. Egypt Aluminum
Performance |
| Timeline |
| El Nasr Clothes |
| Egypt Aluminum |
El Nasr and Egypt Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Nasr and Egypt Aluminum
The main advantage of trading using opposite El Nasr and Egypt Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Nasr 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.| El Nasr vs. Paint Chemicals Industries | El Nasr vs. Reacap Financial Investments | El Nasr vs. Egyptians For Investment | El Nasr 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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