Correlation Between Egyptian Media and Credit Agricole
Can any of the company-specific risk be diversified away by investing in both Egyptian Media and Credit Agricole 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 Egyptian Media and Credit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egyptian Media Production and Credit Agricole Egypt, you can compare the effects of market volatilities on Egyptian Media and Credit Agricole 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 Egyptian Media with a short position of Credit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Media and Credit Agricole.
Diversification Opportunities for Egyptian Media and Credit Agricole
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Egyptian and Credit is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Media Production and Credit Agricole Egypt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Agricole Egypt and Egyptian Media 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 Egyptian Media Production are associated (or correlated) with Credit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Agricole Egypt has no effect on the direction of Egyptian Media i.e., Egyptian Media and Credit Agricole go up and down completely randomly.
Pair Corralation between Egyptian Media and Credit Agricole
Assuming the 90 days trading horizon Egyptian Media Production is expected to generate 4.13 times more return on investment than Credit Agricole. However, Egyptian Media is 4.13 times more volatile than Credit Agricole Egypt. It trades about 0.13 of its potential returns per unit of risk. Credit Agricole Egypt is currently generating about -0.17 per unit of risk. If you would invest 2,230 in Egyptian Media Production on November 4, 2024 and sell it today you would earn a total of 150.00 from holding Egyptian Media Production or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egyptian Media Production vs. Credit Agricole Egypt
Performance |
| Timeline |
| Egyptian Media Production |
| Credit Agricole Egypt |
Egyptian Media and Credit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Media and Credit Agricole
The main advantage of trading using opposite Egyptian Media and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Media position performs unexpectedly, Credit Agricole 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 Credit Agricole will offset losses from the drop in Credit Agricole's long position.| Egyptian Media vs. Orascom Financial Holding | Egyptian Media vs. Commercial International Bank Egypt | Egyptian Media vs. Sidi Kerir Petrochemicals | Egyptian Media vs. Reacap Financial Investments |
| Credit Agricole vs. Misr Hotels | Credit Agricole vs. Telecom Egypt | Credit Agricole vs. Cairo Oils Soap | Credit Agricole vs. Mohandes Insurance |
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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