Correlation Between Telecom Egypt and Orascom Investment
Can any of the company-specific risk be diversified away by investing in both Telecom Egypt 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 Telecom Egypt and Orascom Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Egypt and Orascom Investment Holding, you can compare the effects of market volatilities on Telecom Egypt 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 Telecom Egypt with a short position of Orascom Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Egypt and Orascom Investment.
Diversification Opportunities for Telecom Egypt and Orascom Investment
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Telecom and Orascom is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Egypt and Orascom Investment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orascom Investment and Telecom Egypt 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 Telecom Egypt 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 Telecom Egypt i.e., Telecom Egypt and Orascom Investment go up and down completely randomly.
Pair Corralation between Telecom Egypt and Orascom Investment
Assuming the 90 days trading horizon Telecom Egypt is expected to generate 1.55 times less return on investment than Orascom Investment. But when comparing it to its historical volatility, Telecom Egypt is 1.45 times less risky than Orascom Investment. It trades about 0.05 of its potential returns per unit of risk. Orascom Investment Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Orascom Investment Holding on September 5, 2024 and sell it today you would earn a total of 15.00 from holding Orascom Investment Holding or generate 55.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Telecom Egypt vs. Orascom Investment Holding
Performance |
| Timeline |
| Telecom Egypt |
| Orascom Investment |
Telecom Egypt and Orascom Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Egypt and Orascom Investment
The main advantage of trading using opposite Telecom Egypt and Orascom Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Egypt 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.| Telecom Egypt vs. Zahraa Maadi Investment | Telecom Egypt vs. Odin for Investment | Telecom Egypt vs. The Arab Dairy | Telecom Egypt vs. Egyptians For Investment |
| Orascom Investment vs. Zahraa Maadi Investment | Orascom Investment vs. Egyptians For Investment | Orascom Investment vs. Nile City Investment | Orascom Investment vs. Telecom Egypt |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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