Correlation Between Reacap Financial and Egyptian Media
Can any of the company-specific risk be diversified away by investing in both Reacap Financial and Egyptian Media 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 Egyptian Media 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 Egyptian Media Production, you can compare the effects of market volatilities on Reacap Financial and Egyptian Media 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 Egyptian Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reacap Financial and Egyptian Media.
Diversification Opportunities for Reacap Financial and Egyptian Media
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Reacap and Egyptian is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Reacap Financial Investments and Egyptian Media Production in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Media Production 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 Egyptian Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Media Production has no effect on the direction of Reacap Financial i.e., Reacap Financial and Egyptian Media go up and down completely randomly.
Pair Corralation between Reacap Financial and Egyptian Media
Assuming the 90 days trading horizon Reacap Financial Investments is expected to generate 0.65 times more return on investment than Egyptian Media. However, Reacap Financial Investments is 1.54 times less risky than Egyptian Media. It trades about 0.08 of its potential returns per unit of risk. Egyptian Media Production is currently generating about 0.04 per unit of risk. If you would invest 495.00 in Reacap Financial Investments on September 14, 2024 and sell it today you would earn a total of 196.00 from holding Reacap Financial Investments or generate 39.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reacap Financial Investments vs. Egyptian Media Production
Performance |
| Timeline |
| Reacap Financial Inv |
| Egyptian Media Production |
Reacap Financial and Egyptian Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reacap Financial and Egyptian Media
The main advantage of trading using opposite Reacap Financial and Egyptian Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reacap Financial position performs unexpectedly, Egyptian Media 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 Egyptian Media will offset losses from the drop in Egyptian Media's long position.| Reacap Financial vs. Paint Chemicals Industries | Reacap Financial vs. Egyptians For Investment | Reacap Financial vs. Misr Oils Soap | Reacap Financial vs. Ismailia Development and |
| Egyptian Media vs. Paint Chemicals Industries | Egyptian Media vs. Reacap Financial Investments | Egyptian Media vs. Egyptians For Investment | Egyptian Media 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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