Correlation Between Grand Investment and Egyptian Transport

Can any of the company-specific risk be diversified away by investing in both Grand Investment and Egyptian Transport 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 Grand Investment and Egyptian Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grand Investment Capital and Egyptian Transport, you can compare the effects of market volatilities on Grand Investment and Egyptian Transport 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 Grand Investment with a short position of Egyptian Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Investment and Egyptian Transport.

Diversification Opportunities for Grand Investment and Egyptian Transport

-0.02

Correlation Coefficient

Grand Investment  Egyptian Transport

Good diversification

The 3 months correlation between Grand and Egyptian is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Grand Investment Capital and Egyptian Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Transport and Grand Investment 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 Grand Investment Capital are associated (or correlated) with Egyptian Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Transport has no effect on the direction of Grand Investment i.e., Grand Investment and Egyptian Transport go up and down completely randomly.

Pair Corralation between Grand Investment and Egyptian Transport

Assuming the 90 days trading horizon Grand Investment Capital is expected to under-perform the Egyptian Transport. But the stock apears to be less risky and, when comparing its historical volatility, Grand Investment Capital is 1.09 times less risky than Egyptian Transport. The stock trades about -0.11 of its potential returns per unit of risk. The Egyptian Transport is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  416.00  in Egyptian Transport on September 16, 2024 and sell it today you would earn a total of  188.00  from holding Egyptian Transport or generate 45.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Grand Investment Capital  vs.  Egyptian Transport

Grand Investment Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Investment Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Egyptian Transport

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptian Transport are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Egyptian Transport reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grand Investment and Egyptian Transport

The main advantage of trading using opposite Grand Investment and Egyptian Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Investment position performs unexpectedly, Egyptian Transport 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 Transport will offset losses from the drop in Egyptian Transport's long position.

The idea behind Grand Investment Capital and Egyptian Transport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.