Correlation Between Paint Chemicals and Egyptian Media

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

By analyzing existing cross correlation between Paint Chemicals Industries and Egyptian Media Production, you can compare the effects of market volatilities on Paint Chemicals and Egyptian Media 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 Paint Chemicals with a short position of Egyptian Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paint Chemicals and Egyptian Media.

Diversification Opportunities for Paint Chemicals and Egyptian Media

0.0

Correlation Coefficient

Paint Chemicals  Egyptian Media

Pay attention - limited upside

The 3 months correlation between Paint and Egyptian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Paint Chemicals Industries and Egyptian Media Production in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Media Production and Paint Chemicals 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 Paint Chemicals Industries are associated (or correlated) with Egyptian Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Media Production has no effect on the direction of Paint Chemicals i.e., Paint Chemicals and Egyptian Media go up and down completely randomly.

Pair Corralation between Paint Chemicals and Egyptian Media

If you would invest  1,840  in Egyptian Media Production on September 26, 2024 and sell it today you would earn a total of  406.00  from holding Egyptian Media Production or generate 22.07% return on investment over 90 days.

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

Paint Chemicals Industries  vs.  Egyptian Media Production

Paint Chemicals Indu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paint Chemicals Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Paint Chemicals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Egyptian Media Production

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Egyptian Media Production are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Egyptian Media reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Paint Chemicals and Egyptian Media

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

The idea behind Paint Chemicals Industries and Egyptian Media Production 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.