Correlation Between Reacap Financial and A Capital
Can any of the company-specific risk be diversified away by investing in both Reacap Financial and A Capital 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 Reacap Financial and A Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reacap Financial Investments and A Capital Holding, you can compare the effects of market volatilities on Reacap Financial and A Capital 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 Reacap Financial with a short position of A Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reacap Financial and A Capital.
Diversification Opportunities for Reacap Financial and A Capital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Reacap and ACAP is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Reacap Financial Investments and A Capital Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Capital Holding and Reacap Financial 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 Reacap Financial Investments are associated (or correlated) with A Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Capital Holding has no effect on the direction of Reacap Financial i.e., Reacap Financial and A Capital go up and down completely randomly.
Pair Corralation between Reacap Financial and A Capital
Assuming the 90 days trading horizon Reacap Financial is expected to generate 1.67 times less return on investment than A Capital. But when comparing it to its historical volatility, Reacap Financial Investments is 1.3 times less risky than A Capital. It trades about 0.13 of its potential returns per unit of risk. A Capital Holding is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 152.00 in A Capital Holding on September 12, 2024 and sell it today you would earn a total of 132.00 from holding A Capital Holding or generate 86.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reacap Financial Investments vs. A Capital Holding
Performance |
| Timeline |
| Reacap Financial Inv |
| A Capital Holding |
Reacap Financial and A Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reacap Financial and A Capital
The main advantage of trading using opposite Reacap Financial and A Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reacap Financial position performs unexpectedly, A Capital 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 A Capital will offset losses from the drop in A Capital's long position.| Reacap Financial vs. Al Arafa Investment | Reacap Financial vs. El Ahli Investment | Reacap Financial vs. ODIN Investments | Reacap Financial vs. Cairo For Investment |
| A Capital vs. Paint Chemicals Industries | A Capital vs. Reacap Financial Investments | A Capital vs. Egyptians For Investment | A Capital vs. Misr Oils Soap |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |