Correlation Between Egyptian Media and Reacap Financial
Can any of the company-specific risk be diversified away by investing in both Egyptian Media and Reacap Financial 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 Reacap Financial 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 Reacap Financial Investments, you can compare the effects of market volatilities on Egyptian Media and Reacap Financial 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 Reacap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egyptian Media and Reacap Financial.
Diversification Opportunities for Egyptian Media and Reacap Financial
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Egyptian and Reacap is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Egyptian Media Production and Reacap Financial Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reacap Financial Inv 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 Reacap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reacap Financial Inv has no effect on the direction of Egyptian Media i.e., Egyptian Media and Reacap Financial go up and down completely randomly.
Pair Corralation between Egyptian Media and Reacap Financial
Assuming the 90 days trading horizon Egyptian Media Production is expected to generate 2.04 times more return on investment than Reacap Financial. However, Egyptian Media is 2.04 times more volatile than Reacap Financial Investments. It trades about 0.17 of its potential returns per unit of risk. Reacap Financial Investments is currently generating about 0.06 per unit of risk. If you would invest 2,236 in Egyptian Media Production on October 24, 2024 and sell it today you would earn a total of 194.00 from holding Egyptian Media Production or generate 8.68% 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. Reacap Financial Investments
Performance |
| Timeline |
| Egyptian Media Production |
| Reacap Financial Inv |
Egyptian Media and Reacap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egyptian Media and Reacap Financial
The main advantage of trading using opposite Egyptian Media and Reacap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egyptian Media position performs unexpectedly, Reacap Financial 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 Reacap Financial will offset losses from the drop in Reacap Financial's long position.| Egyptian Media vs. Odin for Investment | Egyptian Media vs. Pyramisa Hotels | Egyptian Media vs. Egyptians For Investment | Egyptian Media vs. Arabia Investments Holding |
| Reacap Financial vs. Egyptian Media Production | Reacap Financial vs. Delta Insurance | Reacap Financial vs. Housing Development Bank | Reacap Financial vs. Credit Agricole Egypt |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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