Correlation Between Sidi Kerir and Egyptian Gulf
Can any of the company-specific risk be diversified away by investing in both Sidi Kerir and Egyptian Gulf 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 Egyptian Gulf 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 Egyptian Gulf Bank, you can compare the effects of market volatilities on Sidi Kerir and Egyptian Gulf 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 Egyptian Gulf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidi Kerir and Egyptian Gulf.
Diversification Opportunities for Sidi Kerir and Egyptian Gulf
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sidi and Egyptian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sidi Kerir Petrochemicals and Egyptian Gulf Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Gulf Bank 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 Egyptian Gulf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Gulf Bank has no effect on the direction of Sidi Kerir i.e., Sidi Kerir and Egyptian Gulf go up and down completely randomly.
Pair Corralation between Sidi Kerir and Egyptian Gulf
Assuming the 90 days trading horizon Sidi Kerir Petrochemicals is expected to generate 2.87 times more return on investment than Egyptian Gulf. However, Sidi Kerir is 2.87 times more volatile than Egyptian Gulf Bank. It trades about 0.18 of its potential returns per unit of risk. Egyptian Gulf Bank is currently generating about 0.25 per unit of risk. If you would invest 1,903 in Sidi Kerir Petrochemicals on October 24, 2024 and sell it today you would earn a total of 140.00 from holding Sidi Kerir Petrochemicals or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sidi Kerir Petrochemicals vs. Egyptian Gulf Bank
Performance |
| Timeline |
| Sidi Kerir Petrochemicals |
| Egyptian Gulf Bank |
Sidi Kerir and Egyptian Gulf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidi Kerir and Egyptian Gulf
The main advantage of trading using opposite Sidi Kerir and Egyptian Gulf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidi Kerir position performs unexpectedly, Egyptian Gulf 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 Gulf will offset losses from the drop in Egyptian Gulf's long position.| Sidi Kerir vs. Grand Investment Capital | Sidi Kerir vs. ODIN Investments | Sidi Kerir vs. Egyptian Financial Industrial | Sidi Kerir vs. Gadwa For Industrial |
| Egyptian Gulf vs. Housing Development Bank | Egyptian Gulf vs. National Bank | Egyptian Gulf vs. Natural Gas Mining | Egyptian Gulf vs. Mohandes Insurance |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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