Correlation Between Grand Investment and Orascom Construction
Can any of the company-specific risk be diversified away by investing in both Grand Investment and Orascom Construction 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 Grand Investment and Orascom Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Investment Capital and Orascom Construction PLC, you can compare the effects of market volatilities on Grand Investment and Orascom Construction 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 Grand Investment with a short position of Orascom Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Investment and Orascom Construction.
Diversification Opportunities for Grand Investment and Orascom Construction
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grand and Orascom is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Grand Investment Capital and Orascom Construction PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orascom Construction PLC and Grand Investment 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 Grand Investment Capital are associated (or correlated) with Orascom Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orascom Construction PLC has no effect on the direction of Grand Investment i.e., Grand Investment and Orascom Construction go up and down completely randomly.
Pair Corralation between Grand Investment and Orascom Construction
Assuming the 90 days trading horizon Grand Investment Capital is expected to generate 1.72 times more return on investment than Orascom Construction. However, Grand Investment is 1.72 times more volatile than Orascom Construction PLC. It trades about 0.33 of its potential returns per unit of risk. Orascom Construction PLC is currently generating about -0.28 per unit of risk. If you would invest 946.00 in Grand Investment Capital on October 20, 2024 and sell it today you would earn a total of 162.00 from holding Grand Investment Capital or generate 17.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Investment Capital vs. Orascom Construction PLC
Performance |
| Timeline |
| Grand Investment Capital |
| Orascom Construction PLC |
Grand Investment and Orascom Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Investment and Orascom Construction
The main advantage of trading using opposite Grand Investment and Orascom Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Investment position performs unexpectedly, Orascom Construction 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 Construction will offset losses from the drop in Orascom Construction's long position.| Grand Investment vs. International Agricultural Products | Grand Investment vs. El Ahli Investment | Grand Investment vs. Delta Construction Rebuilding | Grand Investment vs. Cairo For Investment |
| Orascom Construction vs. Assiut Islamic Trading | Orascom Construction vs. Natural Gas Mining | Orascom Construction vs. Egyptian Iron Steel | Orascom Construction vs. Orascom Investment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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