Correlation Between Sidi Kerir and Cairo Oils
Can any of the company-specific risk be diversified away by investing in both Sidi Kerir and Cairo Oils 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 Sidi Kerir and Cairo Oils into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sidi Kerir Petrochemicals and Cairo Oils Soap, you can compare the effects of market volatilities on Sidi Kerir and Cairo Oils 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 Sidi Kerir with a short position of Cairo Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidi Kerir and Cairo Oils.
Diversification Opportunities for Sidi Kerir and Cairo Oils
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sidi and Cairo is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sidi Kerir Petrochemicals and Cairo Oils Soap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Oils Soap and Sidi Kerir 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 Sidi Kerir Petrochemicals are associated (or correlated) with Cairo Oils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Oils Soap has no effect on the direction of Sidi Kerir i.e., Sidi Kerir and Cairo Oils go up and down completely randomly.
Pair Corralation between Sidi Kerir and Cairo Oils
Assuming the 90 days trading horizon Sidi Kerir Petrochemicals is expected to under-perform the Cairo Oils. But the stock apears to be less risky and, when comparing its historical volatility, Sidi Kerir Petrochemicals is 2.35 times less risky than Cairo Oils. The stock trades about -0.25 of its potential returns per unit of risk. The Cairo Oils Soap is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Cairo Oils Soap on September 19, 2024 and sell it today you would earn a total of 0.00 from holding Cairo Oils Soap or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sidi Kerir Petrochemicals vs. Cairo Oils Soap
Performance |
| Timeline |
| Sidi Kerir Petrochemicals |
| Cairo Oils Soap |
Sidi Kerir and Cairo Oils Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidi Kerir and Cairo Oils
The main advantage of trading using opposite Sidi Kerir and Cairo Oils positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidi Kerir position performs unexpectedly, Cairo Oils 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 Cairo Oils will offset losses from the drop in Cairo Oils' long position.| Sidi Kerir vs. Paint Chemicals Industries | Sidi Kerir vs. Reacap Financial Investments | Sidi Kerir vs. Egyptians For Investment | Sidi Kerir vs. Misr Oils Soap |
| Cairo Oils vs. Paint Chemicals Industries | Cairo Oils vs. Reacap Financial Investments | Cairo Oils vs. Egyptians For Investment | Cairo Oils 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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