Correlation Between Orascom Investment and Egypt Aluminum
Can any of the company-specific risk be diversified away by investing in both Orascom Investment and Egypt Aluminum 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 Investment and Egypt Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orascom Investment Holding and Egypt Aluminum, you can compare the effects of market volatilities on Orascom Investment and Egypt Aluminum 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 Investment with a short position of Egypt Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Investment and Egypt Aluminum.
Diversification Opportunities for Orascom Investment and Egypt Aluminum
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orascom and Egypt is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Investment Holding and Egypt Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egypt Aluminum and Orascom Investment 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 Investment Holding are associated (or correlated) with Egypt Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egypt Aluminum has no effect on the direction of Orascom Investment i.e., Orascom Investment and Egypt Aluminum go up and down completely randomly.
Pair Corralation between Orascom Investment and Egypt Aluminum
Assuming the 90 days trading horizon Orascom Investment Holding is expected to under-perform the Egypt Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Orascom Investment Holding is 1.68 times less risky than Egypt Aluminum. The stock trades about -0.03 of its potential returns per unit of risk. The Egypt Aluminum is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 11,700 in Egypt Aluminum on November 4, 2024 and sell it today you would earn a total of 3,590 from holding Egypt Aluminum or generate 30.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orascom Investment Holding vs. Egypt Aluminum
Performance |
| Timeline |
| Orascom Investment |
| Egypt Aluminum |
Orascom Investment and Egypt Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Investment and Egypt Aluminum
The main advantage of trading using opposite Orascom Investment and Egypt Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Investment position performs unexpectedly, Egypt Aluminum 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 Egypt Aluminum will offset losses from the drop in Egypt Aluminum's long position.| Orascom Investment vs. Paint Chemicals Industries | Orascom Investment vs. Reacap Financial Investments | Orascom Investment vs. Egyptians For Investment | Orascom Investment vs. Misr Oils Soap |
| Egypt Aluminum vs. Reacap Financial Investments | Egypt Aluminum vs. Inter Cairo For Aluminum | Egypt Aluminum vs. Arabia Investments Holding | Egypt Aluminum vs. Delta Construction Rebuilding |
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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