Correlation Between Paint Chemicals and Orascom Financial
Can any of the company-specific risk be diversified away by investing in both Paint Chemicals and Orascom Financial 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 Paint Chemicals and Orascom Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paint Chemicals Industries and Orascom Financial Holding, you can compare the effects of market volatilities on Paint Chemicals and Orascom Financial 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 Paint Chemicals with a short position of Orascom Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paint Chemicals and Orascom Financial.
Diversification Opportunities for Paint Chemicals and Orascom Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Paint and Orascom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Paint Chemicals Industries and Orascom Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orascom Financial Holding and Paint Chemicals 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 Paint Chemicals Industries are associated (or correlated) with Orascom Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orascom Financial Holding has no effect on the direction of Paint Chemicals i.e., Paint Chemicals and Orascom Financial go up and down completely randomly.
Pair Corralation between Paint Chemicals and Orascom Financial
Assuming the 90 days trading horizon Paint Chemicals is expected to generate 1.56 times less return on investment than Orascom Financial. But when comparing it to its historical volatility, Paint Chemicals Industries is 3.4 times less risky than Orascom Financial. It trades about 0.09 of its potential returns per unit of risk. Orascom Financial Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Orascom Financial Holding on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Orascom Financial Holding or generate 34.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paint Chemicals Industries vs. Orascom Financial Holding
Performance |
| Timeline |
| Paint Chemicals Indu |
| Orascom Financial Holding |
Paint Chemicals and Orascom Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paint Chemicals and Orascom Financial
The main advantage of trading using opposite Paint Chemicals and Orascom Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paint Chemicals position performs unexpectedly, Orascom Financial 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 Orascom Financial will offset losses from the drop in Orascom Financial's long position.| Paint Chemicals vs. El Ahli Investment | Paint Chemicals vs. Mohandes Insurance | Paint Chemicals vs. Reacap Financial Investments | Paint Chemicals vs. Nile City Investment |
| Orascom Financial vs. Orascom Construction PLC | Orascom Financial vs. Nile City Investment | Orascom Financial vs. The Arab Dairy | Orascom Financial vs. Sharkia National Food |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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