Correlation Between Misr Chemical and Orascom Investment
Can any of the company-specific risk be diversified away by investing in both Misr Chemical 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 Misr Chemical and Orascom Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Chemical Industries and Orascom Investment Holding, you can compare the effects of market volatilities on Misr Chemical 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 Misr Chemical with a short position of Orascom Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Chemical and Orascom Investment.
Diversification Opportunities for Misr Chemical and Orascom Investment
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Misr and Orascom is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Misr Chemical Industries and Orascom Investment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orascom Investment and Misr Chemical 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 Misr Chemical Industries 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 Misr Chemical i.e., Misr Chemical and Orascom Investment go up and down completely randomly.
Pair Corralation between Misr Chemical and Orascom Investment
Assuming the 90 days trading horizon Misr Chemical is expected to generate 1.36 times less return on investment than Orascom Investment. In addition to that, Misr Chemical is 1.26 times more volatile than Orascom Investment Holding. It trades about 0.04 of its total potential returns per unit of risk. Orascom Investment Holding is currently generating about 0.07 per unit of volatility. If you would invest 25.00 in Orascom Investment Holding on September 2, 2024 and sell it today you would earn a total of 18.00 from holding Orascom Investment Holding or generate 72.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Chemical Industries vs. Orascom Investment Holding
Performance |
| Timeline |
| Misr Chemical Industries |
| Orascom Investment |
Misr Chemical and Orascom Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Chemical and Orascom Investment
The main advantage of trading using opposite Misr Chemical and Orascom Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Chemical 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.| Misr Chemical vs. Egyptians For Investment | Misr Chemical vs. Misr Oils Soap | Misr Chemical vs. Global Telecom Holding | Misr Chemical vs. Qatar Natl Bank |
| Orascom Investment vs. Atlas For Investment | Orascom Investment vs. Saudi Egyptian Investment | Orascom Investment vs. Cairo Oils Soap | Orascom Investment vs. Arab Moltaka Investments |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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