Correlation Between Orascom Investment and Egyptian Gulf
Can any of the company-specific risk be diversified away by investing in both Orascom Investment and Egyptian Gulf 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 Egyptian Gulf 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 Egyptian Gulf Bank, you can compare the effects of market volatilities on Orascom Investment and Egyptian Gulf 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 Egyptian Gulf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Investment and Egyptian Gulf.
Diversification Opportunities for Orascom Investment and Egyptian Gulf
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orascom and Egyptian is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Investment Holding and Egyptian Gulf Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Egyptian Gulf Bank 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 Egyptian Gulf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Egyptian Gulf Bank has no effect on the direction of Orascom Investment i.e., Orascom Investment and Egyptian Gulf go up and down completely randomly.
Pair Corralation between Orascom Investment and Egyptian Gulf
Assuming the 90 days trading horizon Orascom Investment is expected to generate 4.36 times less return on investment than Egyptian Gulf. In addition to that, Orascom Investment is 3.63 times more volatile than Egyptian Gulf Bank. It trades about 0.02 of its total potential returns per unit of risk. Egyptian Gulf Bank is currently generating about 0.25 per unit of volatility. If you would invest 27.00 in Egyptian Gulf Bank on October 24, 2024 and sell it today you would earn a total of 1.00 from holding Egyptian Gulf Bank or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orascom Investment Holding vs. Egyptian Gulf Bank
Performance |
| Timeline |
| Orascom Investment |
| Egyptian Gulf Bank |
Orascom Investment and Egyptian Gulf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Investment and Egyptian Gulf
The main advantage of trading using opposite Orascom Investment and Egyptian Gulf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Investment position performs unexpectedly, Egyptian Gulf 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 Egyptian Gulf will offset losses from the drop in Egyptian Gulf's long position.| Orascom Investment vs. Commercial International Bank Egypt | Orascom Investment vs. Golden Textiles Clothes | Orascom Investment vs. Ezz Steel | Orascom Investment vs. Export Development Bank |
| Egyptian Gulf vs. Housing Development Bank | Egyptian Gulf vs. National Bank | Egyptian Gulf vs. Natural Gas Mining | Egyptian Gulf vs. Mohandes Insurance |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |