Correlation Between Misr Oils and Orascom Investment
Can any of the company-specific risk be diversified away by investing in both Misr Oils 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 Oils 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 Oils Soap and Orascom Investment Holding, you can compare the effects of market volatilities on Misr Oils 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 Oils with a short position of Orascom Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Misr Oils and Orascom Investment.
Diversification Opportunities for Misr Oils and Orascom Investment
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Misr and Orascom is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Misr Oils Soap 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 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 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 Oils i.e., Misr Oils and Orascom Investment go up and down completely randomly.
Pair Corralation between Misr Oils and Orascom Investment
Assuming the 90 days trading horizon Misr Oils Soap is expected to under-perform the Orascom Investment. But the stock apears to be less risky and, when comparing its historical volatility, Misr Oils Soap is 1.63 times less risky than Orascom Investment. The stock trades about -0.14 of its potential returns per unit of risk. The Orascom Investment Holding is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 55.00 in Orascom Investment Holding on November 5, 2024 and sell it today you would lose (1.00) from holding Orascom Investment Holding or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Misr Oils Soap vs. Orascom Investment Holding
Performance |
| Timeline |
| Misr Oils Soap |
| Orascom Investment |
Misr Oils and Orascom Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Misr Oils and Orascom Investment
The main advantage of trading using opposite Misr Oils and Orascom Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Misr Oils 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 Oils vs. Egyptian Transport | Misr Oils vs. Nile City Investment | Misr Oils vs. Telecom Egypt | Misr Oils vs. Orascom Investment Holding |
| Orascom Investment vs. Misr Hotels | Orascom Investment vs. Saudi Egyptian Investment | Orascom Investment vs. Iron And Steel | Orascom Investment vs. Al Tawfeek Leasing |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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