Correlation Between United Bank and Orascom Investment
Can any of the company-specific risk be diversified away by investing in both United Bank 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 United Bank and Orascom Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The United Bank and Orascom Investment Holding, you can compare the effects of market volatilities on United Bank 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 United Bank with a short position of Orascom Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bank and Orascom Investment.
Diversification Opportunities for United Bank and Orascom Investment
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Orascom is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding The United Bank and Orascom Investment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orascom Investment and United Bank 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 The United Bank 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 United Bank i.e., United Bank and Orascom Investment go up and down completely randomly.
Pair Corralation between United Bank and Orascom Investment
Assuming the 90 days trading horizon The United Bank is expected to generate 0.02 times more return on investment than Orascom Investment. However, The United Bank is 55.19 times less risky than Orascom Investment. It trades about 0.29 of its potential returns per unit of risk. Orascom Investment Holding is currently generating about -0.03 per unit of risk. If you would invest 1,440 in The United Bank on November 4, 2024 and sell it today you would earn a total of 3.00 from holding The United Bank or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The United Bank vs. Orascom Investment Holding
Performance |
| Timeline |
| United Bank |
| Orascom Investment |
United Bank and Orascom Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bank and Orascom Investment
The main advantage of trading using opposite United Bank and Orascom Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bank 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.| United Bank vs. Commercial International Bank Egypt | United Bank vs. Reacap Financial Investments | United Bank vs. Cairo Oils Soap | United Bank vs. QALA For Financial |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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