Correlation Between Nozha International and Telecom Egypt
Can any of the company-specific risk be diversified away by investing in both Nozha International 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 Nozha International and Telecom Egypt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nozha International Hospital and Telecom Egypt, you can compare the effects of market volatilities on Nozha International 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 Nozha International with a short position of Telecom Egypt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nozha International and Telecom Egypt.
Diversification Opportunities for Nozha International and Telecom Egypt
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nozha and Telecom is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nozha International Hospital and Telecom Egypt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Egypt and Nozha International 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 Nozha International Hospital 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 Nozha International i.e., Nozha International and Telecom Egypt go up and down completely randomly.
Pair Corralation between Nozha International and Telecom Egypt
Assuming the 90 days trading horizon Nozha International Hospital is expected to under-perform the Telecom Egypt. In addition to that, Nozha International is 2.46 times more volatile than Telecom Egypt. It trades about -0.16 of its total potential returns per unit of risk. Telecom Egypt is currently generating about -0.18 per unit of volatility. If you would invest 3,518 in Telecom Egypt on November 4, 2024 and sell it today you would lose (102.00) from holding Telecom Egypt or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nozha International Hospital vs. Telecom Egypt
Performance |
| Timeline |
| Nozha International |
| Telecom Egypt |
Nozha International and Telecom Egypt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nozha International and Telecom Egypt
The main advantage of trading using opposite Nozha International and Telecom Egypt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nozha International 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.| Nozha International vs. Golden Textiles Clothes | Nozha International vs. Orascom Construction PLC | Nozha International vs. Taaleem Management Services | Nozha International vs. Telecom Egypt |
| Telecom Egypt vs. Reacap Financial Investments | Telecom Egypt vs. Saudi Egyptian Investment | Telecom Egypt vs. Al Arafa Investment | Telecom Egypt vs. Atlas For 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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