Correlation Between Orascom Investment and Misr Oils
Can any of the company-specific risk be diversified away by investing in both Orascom Investment and Misr Oils 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 Misr Oils 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 Misr Oils Soap, you can compare the effects of market volatilities on Orascom Investment and Misr Oils 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 Misr Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Investment and Misr Oils.
Diversification Opportunities for Orascom Investment and Misr Oils
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orascom and Misr is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Investment Holding and Misr Oils Soap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr Oils Soap 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 Misr Oils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr Oils Soap has no effect on the direction of Orascom Investment i.e., Orascom Investment and Misr Oils go up and down completely randomly.
Pair Corralation between Orascom Investment and Misr Oils
Assuming the 90 days trading horizon Orascom Investment Holding is expected to generate 1.63 times more return on investment than Misr Oils. However, Orascom Investment is 1.63 times more volatile than Misr Oils Soap. It trades about -0.03 of its potential returns per unit of risk. Misr Oils Soap is currently generating about -0.14 per unit of risk. If you would invest 55.00 in Orascom Investment Holding on November 5, 2024 and sell it today you would lose (1.00) from holding Orascom Investment Holding or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orascom Investment Holding vs. Misr Oils Soap
Performance |
| Timeline |
| Orascom Investment |
| Misr Oils Soap |
Orascom Investment and Misr Oils Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Investment and Misr Oils
The main advantage of trading using opposite Orascom Investment and Misr Oils positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Investment position performs unexpectedly, Misr Oils 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 Misr Oils will offset losses from the drop in Misr Oils' long position.| Orascom Investment vs. Misr Hotels | Orascom Investment vs. Saudi Egyptian Investment | Orascom Investment vs. Iron And Steel | Orascom Investment vs. Al Tawfeek Leasing |
| Misr Oils vs. Egyptian Transport | Misr Oils vs. Nile City Investment | Misr Oils vs. Telecom Egypt | Misr Oils vs. Orascom Investment 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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