Correlation Between Speed Medical and Orascom Investment
Can any of the company-specific risk be diversified away by investing in both Speed Medical and Orascom Investment 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 Speed Medical and Orascom Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Speed Medical and Orascom Investment Holding, you can compare the effects of market volatilities on Speed Medical and Orascom Investment 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 Speed Medical with a short position of Orascom Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Speed Medical and Orascom Investment.
Diversification Opportunities for Speed Medical and Orascom Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Speed and Orascom is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Speed Medical and Orascom Investment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orascom Investment and Speed Medical 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 Speed Medical are associated (or correlated) with Orascom Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orascom Investment has no effect on the direction of Speed Medical i.e., Speed Medical and Orascom Investment go up and down completely randomly.
Pair Corralation between Speed Medical and Orascom Investment
Assuming the 90 days trading horizon Speed Medical is expected to generate 1.49 times less return on investment than Orascom Investment. But when comparing it to its historical volatility, Speed Medical is 1.23 times less risky than Orascom Investment. It trades about 0.01 of its potential returns per unit of risk. Orascom Investment Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Orascom Investment Holding on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Orascom Investment Holding or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Speed Medical vs. Orascom Investment Holding
Performance |
| Timeline |
| Speed Medical |
| Orascom Investment |
Speed Medical and Orascom Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Speed Medical and Orascom Investment
The main advantage of trading using opposite Speed Medical and Orascom Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Speed Medical position performs unexpectedly, Orascom Investment 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 Investment will offset losses from the drop in Orascom Investment's long position.| Speed Medical vs. Misr Oils Soap | Speed Medical vs. Global Telecom Holding | Speed Medical vs. Qatar Natl Bank | Speed Medical vs. Al Tawfeek Leasing |
| Orascom Investment vs. Zahraa Maadi Investment | Orascom Investment vs. Egyptians For Investment | Orascom Investment vs. Nile City Investment | Orascom Investment vs. Telecom Egypt |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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