Correlation Between Orascom Investment and Zahraa Maadi
Can any of the company-specific risk be diversified away by investing in both Orascom Investment and Zahraa Maadi 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 Zahraa Maadi 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 Zahraa Maadi Investment, you can compare the effects of market volatilities on Orascom Investment and Zahraa Maadi 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 Zahraa Maadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Investment and Zahraa Maadi.
Diversification Opportunities for Orascom Investment and Zahraa Maadi
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orascom and Zahraa is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Investment Holding and Zahraa Maadi Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zahraa Maadi Investment 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 Zahraa Maadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zahraa Maadi Investment has no effect on the direction of Orascom Investment i.e., Orascom Investment and Zahraa Maadi go up and down completely randomly.
Pair Corralation between Orascom Investment and Zahraa Maadi
Assuming the 90 days trading horizon Orascom Investment Holding is expected to generate 1.34 times more return on investment than Zahraa Maadi. However, Orascom Investment is 1.34 times more volatile than Zahraa Maadi Investment. It trades about 0.13 of its potential returns per unit of risk. Zahraa Maadi Investment is currently generating about -0.25 per unit of risk. If you would invest 43.00 in Orascom Investment Holding on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Orascom Investment Holding or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Orascom Investment Holding vs. Zahraa Maadi Investment
Performance |
| Timeline |
| Orascom Investment |
| Zahraa Maadi Investment |
Orascom Investment and Zahraa Maadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Investment and Zahraa Maadi
The main advantage of trading using opposite Orascom Investment and Zahraa Maadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Investment position performs unexpectedly, Zahraa Maadi 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 Zahraa Maadi will offset losses from the drop in Zahraa Maadi's long position.| Orascom Investment vs. International Agricultural Products | Orascom Investment vs. Arab Moltaka Investments | Orascom Investment vs. Assiut Islamic Trading | Orascom Investment vs. Golden Textiles Clothes |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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