Correlation Between Misr Chemical and Commercial International
Can any of the company-specific risk be diversified away by investing in both Misr Chemical and Commercial International 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 Misr Chemical and Commercial International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Chemical Industries and Commercial International Bank Egypt, you can compare the effects of market volatilities on Misr Chemical and Commercial International 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 Misr Chemical with a short position of Commercial International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Chemical and Commercial International.
Diversification Opportunities for Misr Chemical and Commercial International
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Misr and Commercial is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Misr Chemical Industries and Commercial International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial International and Misr Chemical 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 Misr Chemical Industries are associated (or correlated) with Commercial International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial International has no effect on the direction of Misr Chemical i.e., Misr Chemical and Commercial International go up and down completely randomly.
Pair Corralation between Misr Chemical and Commercial International
Assuming the 90 days trading horizon Misr Chemical Industries is expected to under-perform the Commercial International. In addition to that, Misr Chemical is 4.06 times more volatile than Commercial International Bank Egypt. It trades about -0.31 of its total potential returns per unit of risk. Commercial International Bank Egypt is currently generating about -0.1 per unit of volatility. If you would invest 7,998 in Commercial International Bank Egypt on August 30, 2024 and sell it today you would lose (138.00) from holding Commercial International Bank Egypt or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Chemical Industries vs. Commercial International Bank
Performance |
| Timeline |
| Misr Chemical Industries |
| Commercial International |
Misr Chemical and Commercial International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Chemical and Commercial International
The main advantage of trading using opposite Misr Chemical and Commercial International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Chemical position performs unexpectedly, Commercial International 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 Commercial International will offset losses from the drop in Commercial International's long position.| Misr Chemical vs. Paint Chemicals Industries | Misr Chemical vs. Egyptians For Investment | Misr Chemical vs. Misr Oils Soap | Misr Chemical vs. Global Telecom Holding |
| Commercial International vs. Al Arafa Investment | Commercial International vs. Taaleem Management Services | Commercial International vs. Misr Oils Soap | Commercial International vs. Nile City Investment |
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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