Correlation Between Speed Medical and Egyptian Iron
Can any of the company-specific risk be diversified away by investing in both Speed Medical and Egyptian Iron 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 Egyptian Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Speed Medical and Egyptian Iron Steel, you can compare the effects of market volatilities on Speed Medical and Egyptian Iron 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 Egyptian Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Speed Medical and Egyptian Iron.
Diversification Opportunities for Speed Medical and Egyptian Iron
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Speed and Egyptian is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Speed Medical and Egyptian Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Iron Steel 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 Egyptian Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Iron Steel has no effect on the direction of Speed Medical i.e., Speed Medical and Egyptian Iron go up and down completely randomly.
Pair Corralation between Speed Medical and Egyptian Iron
Assuming the 90 days trading horizon Speed Medical is expected to generate 0.72 times more return on investment than Egyptian Iron. However, Speed Medical is 1.39 times less risky than Egyptian Iron. It trades about 0.01 of its potential returns per unit of risk. Egyptian Iron Steel is currently generating about 0.0 per unit of risk. If you would invest 36.00 in Speed Medical on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Speed Medical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Speed Medical vs. Egyptian Iron Steel
Performance |
| Timeline |
| Speed Medical |
| Egyptian Iron Steel |
Speed Medical and Egyptian Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Speed Medical and Egyptian Iron
The main advantage of trading using opposite Speed Medical and Egyptian Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Speed Medical position performs unexpectedly, Egyptian Iron 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 Iron will offset losses from the drop in Egyptian Iron's long position.| Speed Medical vs. Al Tawfeek Leasing | Speed Medical vs. Mohandes Insurance | Speed Medical vs. General Silos Storage | Speed Medical vs. Delta Construction Rebuilding |
| Egyptian Iron vs. Nile City Investment | Egyptian Iron vs. Sharkia National Food | Egyptian Iron vs. Misr Financial Investments | Egyptian Iron vs. Egyptian Chemical Industries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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