Correlation Between Al Khair and Telecom Egypt
Can any of the company-specific risk be diversified away by investing in both Al Khair 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 Al Khair and Telecom Egypt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Khair River and Telecom Egypt, you can compare the effects of market volatilities on Al Khair 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 Al Khair with a short position of Telecom Egypt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Khair and Telecom Egypt.
Diversification Opportunities for Al Khair and Telecom Egypt
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between KRDI and Telecom is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Al Khair River and Telecom Egypt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Egypt and Al Khair 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 Al Khair River 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 Al Khair i.e., Al Khair and Telecom Egypt go up and down completely randomly.
Pair Corralation between Al Khair and Telecom Egypt
Assuming the 90 days trading horizon Al Khair River is expected to generate 1.27 times more return on investment than Telecom Egypt. However, Al Khair is 1.27 times more volatile than Telecom Egypt. It trades about 0.08 of its potential returns per unit of risk. Telecom Egypt is currently generating about 0.01 per unit of risk. If you would invest 52.00 in Al Khair River on September 15, 2024 and sell it today you would earn a total of 5.00 from holding Al Khair River or generate 9.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Al Khair River vs. Telecom Egypt
Performance |
Timeline |
Al Khair River |
Telecom Egypt |
Al Khair and Telecom Egypt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Al Khair and Telecom Egypt
The main advantage of trading using opposite Al Khair and Telecom Egypt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Khair 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.Al Khair vs. Paint Chemicals Industries | Al Khair vs. Reacap Financial Investments | Al Khair vs. Egyptians For Investment | Al Khair vs. Misr Oils Soap |
Telecom Egypt vs. Paint Chemicals Industries | Telecom Egypt vs. Reacap Financial Investments | Telecom Egypt vs. Egyptians For Investment | Telecom Egypt vs. Misr Oils Soap |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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