Correlation Between Orascom Financial and Export Development
Can any of the company-specific risk be diversified away by investing in both Orascom Financial and Export Development 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 Orascom Financial and Export Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orascom Financial Holding and Export Development Bank, you can compare the effects of market volatilities on Orascom Financial and Export Development 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 Orascom Financial with a short position of Export Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Financial and Export Development.
Diversification Opportunities for Orascom Financial and Export Development
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orascom and Export is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Financial Holding and Export Development Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Export Development Bank and Orascom Financial 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 Orascom Financial Holding are associated (or correlated) with Export Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Export Development Bank has no effect on the direction of Orascom Financial i.e., Orascom Financial and Export Development go up and down completely randomly.
Pair Corralation between Orascom Financial and Export Development
Assuming the 90 days trading horizon Orascom Financial Holding is expected to generate 2.52 times more return on investment than Export Development. However, Orascom Financial is 2.52 times more volatile than Export Development Bank. It trades about 0.17 of its potential returns per unit of risk. Export Development Bank is currently generating about -0.24 per unit of risk. If you would invest 39.00 in Orascom Financial Holding on October 12, 2024 and sell it today you would earn a total of 4.00 from holding Orascom Financial Holding or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orascom Financial Holding vs. Export Development Bank
Performance |
| Timeline |
| Orascom Financial Holding |
| Export Development Bank |
Orascom Financial and Export Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Financial and Export Development
The main advantage of trading using opposite Orascom Financial and Export Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Financial position performs unexpectedly, Export Development 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 Export Development will offset losses from the drop in Export Development's long position.| Orascom Financial vs. Iron And Steel | Orascom Financial vs. Reacap Financial Investments | Orascom Financial vs. Golden Textiles Clothes | Orascom Financial vs. Saudi Egyptian Investment |
| Export Development vs. Edita Food Industries | Export Development vs. El Nasr Clothes | Export Development vs. Juhayna Food Industries | Export Development vs. Arabian Food Industries |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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