Correlation Between El Nasr and Credit Agricole

Can any of the company-specific risk be diversified away by investing in both El Nasr and Credit Agricole 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 El Nasr and Credit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between El Nasr Clothes and Credit Agricole Egypt, you can compare the effects of market volatilities on El Nasr and Credit Agricole 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 El Nasr with a short position of Credit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Nasr and Credit Agricole.

Diversification Opportunities for El Nasr and Credit Agricole

0.58

Correlation Coefficient

El Nasr  Credit Agricole

Very weak diversification

The 3 months correlation between KABO and Credit is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding El Nasr Clothes and Credit Agricole Egypt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Agricole Egypt and El Nasr 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 El Nasr Clothes are associated (or correlated) with Credit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Agricole Egypt has no effect on the direction of El Nasr i.e., El Nasr and Credit Agricole go up and down completely randomly.

Pair Corralation between El Nasr and Credit Agricole

Assuming the 90 days trading horizon El Nasr is expected to generate 1.14 times less return on investment than Credit Agricole. In addition to that, El Nasr is 1.06 times more volatile than Credit Agricole Egypt. It trades about 0.07 of its total potential returns per unit of risk. Credit Agricole Egypt is currently generating about 0.09 per unit of volatility. If you would invest  854.00  in Credit Agricole Egypt on September 18, 2024 and sell it today you would earn a total of  1,233  from holding Credit Agricole Egypt or generate 144.38% return on investment over 90 days.

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

El Nasr Clothes  vs.  Credit Agricole Egypt

El Nasr Clothes

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in El Nasr Clothes are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, El Nasr reported solid returns over the last few months and may actually be approaching a breakup point.

Credit Agricole Egypt

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Agricole Egypt are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Credit Agricole may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with El Nasr and Credit Agricole

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

The idea behind El Nasr Clothes and Credit Agricole Egypt 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.