Correlation Between Misr Oils and Orascom Financial
Can any of the company-specific risk be diversified away by investing in both Misr Oils 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 Misr Oils and Orascom Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Misr Oils Soap and Orascom Financial Holding, you can compare the effects of market volatilities on Misr Oils 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 Misr Oils with a short position of Orascom Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Oils and Orascom Financial.
Diversification Opportunities for Misr Oils and Orascom Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Misr and Orascom is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Misr Oils Soap 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 Misr Oils 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 Oils Soap 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 Misr Oils i.e., Misr Oils and Orascom Financial go up and down completely randomly.
Pair Corralation between Misr Oils and Orascom Financial
Assuming the 90 days trading horizon Misr Oils Soap is expected to generate 0.74 times more return on investment than Orascom Financial. However, Misr Oils Soap is 1.35 times less risky than Orascom Financial. It trades about 0.1 of its potential returns per unit of risk. Orascom Financial Holding is currently generating about 0.04 per unit of risk. If you would invest 2,672 in Misr Oils Soap on August 31, 2024 and sell it today you would earn a total of 3,538 from holding Misr Oils Soap or generate 132.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Oils Soap vs. Orascom Financial Holding
Performance |
| Timeline |
| Misr Oils Soap |
| Orascom Financial Holding |
Misr Oils and Orascom Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Oils and Orascom Financial
The main advantage of trading using opposite Misr Oils and Orascom Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Oils 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.| Misr Oils vs. Atlas For Investment | Misr Oils vs. Saudi Egyptian Investment | Misr Oils vs. El Ahli Investment | Misr Oils vs. Iron And Steel |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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