Correlation Between Orascom Financial and Speed Medical
Can any of the company-specific risk be diversified away by investing in both Orascom Financial and Speed Medical 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 Speed Medical 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 Speed Medical, you can compare the effects of market volatilities on Orascom Financial and Speed Medical 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 Speed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Financial and Speed Medical.
Diversification Opportunities for Orascom Financial and Speed Medical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orascom and Speed is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Financial Holding and Speed Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Speed Medical 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 Speed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Speed Medical has no effect on the direction of Orascom Financial i.e., Orascom Financial and Speed Medical go up and down completely randomly.
Pair Corralation between Orascom Financial and Speed Medical
Assuming the 90 days trading horizon Orascom Financial Holding is expected to under-perform the Speed Medical. In addition to that, Orascom Financial is 1.25 times more volatile than Speed Medical. It trades about -0.04 of its total potential returns per unit of risk. Speed Medical is currently generating about 0.01 per unit of volatility. If you would invest 37.00 in Speed Medical on September 24, 2024 and sell it today you would earn a total of 0.00 from holding Speed Medical or generate 0.0% 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. Speed Medical
Performance |
| Timeline |
| Orascom Financial Holding |
| Speed Medical |
Orascom Financial and Speed Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Financial and Speed Medical
The main advantage of trading using opposite Orascom Financial and Speed Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Financial position performs unexpectedly, Speed Medical 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 Speed Medical will offset losses from the drop in Speed Medical's long position.| Orascom Financial vs. Memphis Pharmaceuticals | Orascom Financial vs. Paint Chemicals Industries | Orascom Financial vs. Egyptians For Investment | Orascom Financial vs. Global Telecom Holding |
| Speed Medical vs. Memphis Pharmaceuticals | Speed Medical vs. Paint Chemicals Industries | Speed Medical vs. Egyptians For Investment | Speed Medical vs. Global Telecom Holding |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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