Correlation Between El Ahli and Orascom Investment
Can any of the company-specific risk be diversified away by investing in both El Ahli and Orascom Investment 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 Ahli and Orascom Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Ahli Investment and Orascom Investment Holding, you can compare the effects of market volatilities on El Ahli and Orascom Investment 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 Ahli with a short position of Orascom Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Ahli and Orascom Investment.
Diversification Opportunities for El Ahli and Orascom Investment
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AFDI and Orascom is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding El Ahli Investment and Orascom Investment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orascom Investment and El Ahli 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 Ahli Investment are associated (or correlated) with Orascom Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orascom Investment has no effect on the direction of El Ahli i.e., El Ahli and Orascom Investment go up and down completely randomly.
Pair Corralation between El Ahli and Orascom Investment
Assuming the 90 days trading horizon El Ahli Investment is expected to under-perform the Orascom Investment. But the stock apears to be less risky and, when comparing its historical volatility, El Ahli Investment is 1.52 times less risky than Orascom Investment. The stock trades about -0.17 of its potential returns per unit of risk. The Orascom Investment Holding is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Orascom Investment Holding on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Orascom Investment Holding or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Ahli Investment vs. Orascom Investment Holding
Performance |
| Timeline |
| El Ahli Investment |
| Orascom Investment |
El Ahli and Orascom Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Ahli and Orascom Investment
The main advantage of trading using opposite El Ahli and Orascom Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Ahli position performs unexpectedly, Orascom Investment 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 Orascom Investment will offset losses from the drop in Orascom Investment's long position.| El Ahli vs. Paint Chemicals Industries | El Ahli vs. Egyptians For Investment | El Ahli vs. Misr Oils Soap | El Ahli vs. Global Telecom Holding |
| Orascom Investment vs. Paint Chemicals Industries | Orascom Investment vs. Egyptians For Investment | Orascom Investment vs. Misr Oils Soap | Orascom Investment vs. Global Telecom Holding |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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