Correlation Between Medical Packaging and Telecom Egypt
Can any of the company-specific risk be diversified away by investing in both Medical Packaging and Telecom Egypt 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 Medical Packaging and Telecom Egypt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Packaging and Telecom Egypt, you can compare the effects of market volatilities on Medical Packaging and Telecom Egypt 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 Medical Packaging with a short position of Telecom Egypt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Packaging and Telecom Egypt.
Diversification Opportunities for Medical Packaging and Telecom Egypt
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Medical and Telecom is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Medical Packaging and Telecom Egypt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Egypt and Medical Packaging 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 Medical Packaging are associated (or correlated) with Telecom Egypt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Egypt has no effect on the direction of Medical Packaging i.e., Medical Packaging and Telecom Egypt go up and down completely randomly.
Pair Corralation between Medical Packaging and Telecom Egypt
Assuming the 90 days trading horizon Medical Packaging is expected to generate 1.89 times more return on investment than Telecom Egypt. However, Medical Packaging is 1.89 times more volatile than Telecom Egypt. It trades about 0.09 of its potential returns per unit of risk. Telecom Egypt is currently generating about 0.13 per unit of risk. If you would invest 129.00 in Medical Packaging on September 24, 2024 and sell it today you would earn a total of 5.00 from holding Medical Packaging or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Packaging vs. Telecom Egypt
Performance |
| Timeline |
| Medical Packaging |
| Telecom Egypt |
Medical Packaging and Telecom Egypt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Packaging and Telecom Egypt
The main advantage of trading using opposite Medical Packaging and Telecom Egypt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Packaging position performs unexpectedly, Telecom Egypt 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 Telecom Egypt will offset losses from the drop in Telecom Egypt's long position.| Medical Packaging vs. Memphis Pharmaceuticals | Medical Packaging vs. Paint Chemicals Industries | Medical Packaging vs. Egyptians For Investment | Medical Packaging vs. Global Telecom Holding |
| Telecom Egypt vs. Memphis Pharmaceuticals | Telecom Egypt vs. Paint Chemicals Industries | Telecom Egypt vs. Egyptians For Investment | Telecom Egypt 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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