Correlation Between Orascom Financial and Paint Chemicals
Can any of the company-specific risk be diversified away by investing in both Orascom Financial and Paint Chemicals 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 Paint Chemicals 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 Paint Chemicals Industries, you can compare the effects of market volatilities on Orascom Financial and Paint Chemicals 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 Paint Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Financial and Paint Chemicals.
Diversification Opportunities for Orascom Financial and Paint Chemicals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Orascom and Paint is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Financial Holding and Paint Chemicals Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paint Chemicals Indu 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 Paint Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paint Chemicals Indu has no effect on the direction of Orascom Financial i.e., Orascom Financial and Paint Chemicals go up and down completely randomly.
Pair Corralation between Orascom Financial and Paint Chemicals
Assuming the 90 days trading horizon Orascom Financial Holding is expected to generate 6.65 times more return on investment than Paint Chemicals. However, Orascom Financial is 6.65 times more volatile than Paint Chemicals Industries. It trades about 0.05 of its potential returns per unit of risk. Paint Chemicals Industries is currently generating about 0.05 per unit of risk. If you would invest 25.00 in Orascom Financial Holding on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Orascom Financial Holding or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orascom Financial Holding vs. Paint Chemicals Industries
Performance |
| Timeline |
| Orascom Financial Holding |
| Paint Chemicals Indu |
Orascom Financial and Paint Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Financial and Paint Chemicals
The main advantage of trading using opposite Orascom Financial and Paint Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Financial position performs unexpectedly, Paint Chemicals 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 Paint Chemicals will offset losses from the drop in Paint Chemicals' long position.| Orascom Financial vs. Orascom Construction PLC | Orascom Financial vs. Nile City Investment | Orascom Financial vs. The Arab Dairy | Orascom Financial vs. Sharkia National Food |
| Paint Chemicals vs. El Ahli Investment | Paint Chemicals vs. Mohandes Insurance | Paint Chemicals vs. Reacap Financial Investments | Paint Chemicals vs. Nile City Investment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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