Correlation Between Orascom Construction and Misr Oils
Can any of the company-specific risk be diversified away by investing in both Orascom Construction 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 Construction 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 Construction PLC and Misr Oils Soap, you can compare the effects of market volatilities on Orascom Construction 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 Construction with a short position of Misr Oils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Construction and Misr Oils.
Diversification Opportunities for Orascom Construction and Misr Oils
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orascom and Misr is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Construction PLC 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 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 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 Construction i.e., Orascom Construction and Misr Oils go up and down completely randomly.
Pair Corralation between Orascom Construction and Misr Oils
Assuming the 90 days trading horizon Orascom Construction PLC is expected to under-perform the Misr Oils. In addition to that, Orascom Construction is 1.35 times more volatile than Misr Oils Soap. It trades about -0.21 of its total potential returns per unit of risk. Misr Oils Soap is currently generating about -0.14 per unit of volatility. If you would invest 5,896 in Misr Oils Soap on November 5, 2024 and sell it today you would lose (207.00) from holding Misr Oils Soap or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orascom Construction PLC vs. Misr Oils Soap
Performance |
| Timeline |
| Orascom Construction PLC |
| Misr Oils Soap |
Orascom Construction and Misr Oils Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Construction and Misr Oils
The main advantage of trading using opposite Orascom Construction and Misr Oils positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Construction 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 Construction vs. Reacap Financial Investments | Orascom Construction vs. Grand Investment Capital | Orascom Construction vs. El Ahli Investment | Orascom Construction vs. Cairo For Investment |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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