Correlation Between Orascom Construction and Cairo For
Can any of the company-specific risk be diversified away by investing in both Orascom Construction and Cairo For 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 Construction and Cairo For into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orascom Construction PLC and Cairo For Investment, you can compare the effects of market volatilities on Orascom Construction and Cairo For 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 Construction with a short position of Cairo For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Construction and Cairo For.
Diversification Opportunities for Orascom Construction and Cairo For
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orascom and Cairo is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Construction PLC and Cairo For Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo For Investment and Orascom Construction 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 Construction PLC are associated (or correlated) with Cairo For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo For Investment has no effect on the direction of Orascom Construction i.e., Orascom Construction and Cairo For go up and down completely randomly.
Pair Corralation between Orascom Construction and Cairo For
Assuming the 90 days trading horizon Orascom Construction PLC is expected to under-perform the Cairo For. In addition to that, Orascom Construction is 1.55 times more volatile than Cairo For Investment. It trades about -0.28 of its total potential returns per unit of risk. Cairo For Investment is currently generating about 0.35 per unit of volatility. If you would invest 1,450 in Cairo For Investment on October 20, 2024 and sell it today you would earn a total of 96.00 from holding Cairo For Investment or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orascom Construction PLC vs. Cairo For Investment
Performance |
| Timeline |
| Orascom Construction PLC |
| Cairo For Investment |
Orascom Construction and Cairo For Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Construction and Cairo For
The main advantage of trading using opposite Orascom Construction and Cairo For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Construction position performs unexpectedly, Cairo For 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 Cairo For will offset losses from the drop in Cairo For's long position.| Orascom Construction vs. Assiut Islamic Trading | Orascom Construction vs. Natural Gas Mining | Orascom Construction vs. Egyptian Iron Steel | Orascom Construction vs. Orascom Investment Holding |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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