Correlation Between Export Development and Misr Oils

Can any of the company-specific risk be diversified away by investing in both Export Development and Misr Oils 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 Export Development and Misr Oils into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Export Development Bank and Misr Oils Soap, you can compare the effects of market volatilities on Export Development and Misr Oils 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 Export Development with a short position of Misr Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Export Development and Misr Oils.

Diversification Opportunities for Export Development and Misr Oils

-0.45

Correlation Coefficient

Export Development  Misr Oils

Very good diversification

The 3 months correlation between Export and Misr is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Export Development Bank and Misr Oils Soap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr Oils Soap and Export Development 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 Export Development Bank are associated (or correlated) with Misr Oils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr Oils Soap has no effect on the direction of Export Development i.e., Export Development and Misr Oils go up and down completely randomly.

Pair Corralation between Export Development and Misr Oils

Assuming the 90 days trading horizon Export Development Bank is expected to under-perform the Misr Oils. But the stock apears to be less risky and, when comparing its historical volatility, Export Development Bank is 1.55 times less risky than Misr Oils. The stock trades about -0.02 of its potential returns per unit of risk. The Misr Oils Soap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  7,232  in Misr Oils Soap on April 25, 2025 and sell it today you would earn a total of  1,282  from holding Misr Oils Soap or generate 17.73% return on investment over 90 days.

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

Export Development Bank  vs.  Misr Oils Soap

Export Development Bank

Risk-Adjusted Performance

Very Weak

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

Misr Oils Soap

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Misr Oils Soap are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Misr Oils reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Export Development and Misr Oils

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

The idea behind Export Development Bank and Misr Oils Soap 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.