Correlation Between Speed Medical and Telecom Egypt
Can any of the company-specific risk be diversified away by investing in both Speed Medical and Telecom Egypt 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 Speed Medical and Telecom Egypt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Speed Medical and Telecom Egypt, you can compare the effects of market volatilities on Speed Medical and Telecom Egypt 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 Speed Medical with a short position of Telecom Egypt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Speed Medical and Telecom Egypt.
Diversification Opportunities for Speed Medical and Telecom Egypt
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Speed and Telecom is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Speed Medical and Telecom Egypt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Egypt and Speed Medical 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 Speed Medical are associated (or correlated) with Telecom Egypt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Egypt has no effect on the direction of Speed Medical i.e., Speed Medical and Telecom Egypt go up and down completely randomly.
Pair Corralation between Speed Medical and Telecom Egypt
Assuming the 90 days trading horizon Speed Medical is expected to generate 8.55 times less return on investment than Telecom Egypt. In addition to that, Speed Medical is 1.48 times more volatile than Telecom Egypt. It trades about 0.01 of its total potential returns per unit of risk. Telecom Egypt is currently generating about 0.13 per unit of volatility. If you would invest 3,240 in Telecom Egypt on September 24, 2024 and sell it today you would earn a total of 100.00 from holding Telecom Egypt or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Speed Medical vs. Telecom Egypt
Performance |
| Timeline |
| Speed Medical |
| Telecom Egypt |
Speed Medical and Telecom Egypt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Speed Medical and Telecom Egypt
The main advantage of trading using opposite Speed Medical and Telecom Egypt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Speed Medical position performs unexpectedly, Telecom Egypt 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 Telecom Egypt will offset losses from the drop in Telecom Egypt's long position.| Speed Medical vs. Memphis Pharmaceuticals | Speed Medical vs. Paint Chemicals Industries | Speed Medical vs. Egyptians For Investment | Speed Medical vs. Global Telecom Holding |
| Telecom Egypt vs. Memphis Pharmaceuticals | Telecom Egypt vs. Paint Chemicals Industries | Telecom Egypt vs. Egyptians For Investment | Telecom Egypt vs. Global Telecom Holding |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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