Correlation Between Nozha International and Orascom Construction
Can any of the company-specific risk be diversified away by investing in both Nozha International 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 Nozha International and Orascom Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nozha International Hospital and Orascom Construction PLC, you can compare the effects of market volatilities on Nozha International 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 Nozha International with a short position of Orascom Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nozha International and Orascom Construction.
Diversification Opportunities for Nozha International and Orascom Construction
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nozha and Orascom is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nozha International Hospital 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 Nozha International 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 Nozha International Hospital 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 Nozha International i.e., Nozha International and Orascom Construction go up and down completely randomly.
Pair Corralation between Nozha International and Orascom Construction
Assuming the 90 days trading horizon Nozha International Hospital is expected to generate 1.19 times more return on investment than Orascom Construction. However, Nozha International is 1.19 times more volatile than Orascom Construction PLC. It trades about -0.16 of its potential returns per unit of risk. Orascom Construction PLC is currently generating about -0.21 per unit of risk. If you would invest 910.00 in Nozha International Hospital on November 4, 2024 and sell it today you would lose (61.00) from holding Nozha International Hospital or give up 6.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nozha International Hospital vs. Orascom Construction PLC
Performance |
| Timeline |
| Nozha International |
| Orascom Construction PLC |
Nozha International and Orascom Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nozha International and Orascom Construction
The main advantage of trading using opposite Nozha International and Orascom Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nozha International 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.| Nozha International vs. Golden Textiles Clothes | Nozha International vs. Orascom Construction PLC | Nozha International vs. Taaleem Management Services | Nozha International vs. Telecom Egypt |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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