Correlation Between Sidi Kerir and Reacap Financial
Can any of the company-specific risk be diversified away by investing in both Sidi Kerir and Reacap Financial 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 Reacap Financial 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 Reacap Financial Investments, you can compare the effects of market volatilities on Sidi Kerir and Reacap Financial 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 Reacap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidi Kerir and Reacap Financial.
Diversification Opportunities for Sidi Kerir and Reacap Financial
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sidi and Reacap is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sidi Kerir Petrochemicals and Reacap Financial Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reacap Financial Inv 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 Reacap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reacap Financial Inv has no effect on the direction of Sidi Kerir i.e., Sidi Kerir and Reacap Financial go up and down completely randomly.
Pair Corralation between Sidi Kerir and Reacap Financial
Assuming the 90 days trading horizon Sidi Kerir Petrochemicals is expected to generate 0.48 times more return on investment than Reacap Financial. However, Sidi Kerir Petrochemicals is 2.09 times less risky than Reacap Financial. It trades about -0.25 of its potential returns per unit of risk. Reacap Financial Investments is currently generating about -0.37 per unit of risk. If you would invest 2,090 in Sidi Kerir Petrochemicals on September 19, 2024 and sell it today you would lose (102.00) from holding Sidi Kerir Petrochemicals or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sidi Kerir Petrochemicals vs. Reacap Financial Investments
Performance |
| Timeline |
| Sidi Kerir Petrochemicals |
| Reacap Financial Inv |
Sidi Kerir and Reacap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidi Kerir and Reacap Financial
The main advantage of trading using opposite Sidi Kerir and Reacap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidi Kerir position performs unexpectedly, Reacap Financial 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 Reacap Financial will offset losses from the drop in Reacap Financial's 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 |
| Reacap Financial vs. Mohandes Insurance | Reacap Financial vs. Egyptian Transport | Reacap Financial vs. Orascom Financial Holding | Reacap Financial vs. Housing Development Bank |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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