Correlation Between Golden Textiles and Orascom Financial
Can any of the company-specific risk be diversified away by investing in both Golden Textiles and Orascom Financial 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 Golden Textiles and Orascom Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Textiles Clothes and Orascom Financial Holding, you can compare the effects of market volatilities on Golden Textiles and Orascom Financial 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 Golden Textiles with a short position of Orascom Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Textiles and Orascom Financial.
Diversification Opportunities for Golden Textiles and Orascom Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Orascom is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Golden Textiles Clothes and Orascom Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orascom Financial Holding and Golden Textiles 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 Golden Textiles Clothes are associated (or correlated) with Orascom Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orascom Financial Holding has no effect on the direction of Golden Textiles i.e., Golden Textiles and Orascom Financial go up and down completely randomly.
Pair Corralation between Golden Textiles and Orascom Financial
Assuming the 90 days trading horizon Golden Textiles Clothes is expected to generate 1.19 times more return on investment than Orascom Financial. However, Golden Textiles is 1.19 times more volatile than Orascom Financial Holding. It trades about 0.12 of its potential returns per unit of risk. Orascom Financial Holding is currently generating about 0.14 per unit of risk. If you would invest 2,597 in Golden Textiles Clothes on October 12, 2024 and sell it today you would earn a total of 429.00 from holding Golden Textiles Clothes or generate 16.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Textiles Clothes vs. Orascom Financial Holding
Performance |
| Timeline |
| Golden Textiles Clothes |
| Orascom Financial Holding |
Golden Textiles and Orascom Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Textiles and Orascom Financial
The main advantage of trading using opposite Golden Textiles and Orascom Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Textiles position performs unexpectedly, Orascom Financial 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 Financial will offset losses from the drop in Orascom Financial's long position.| Golden Textiles vs. Arab Moltaka Investments | Golden Textiles vs. Al Arafa Investment | Golden Textiles vs. Speed Medical | Golden Textiles vs. Arabia Investments Holding |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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