Correlation Between Orascom Investment and Grand Investment

Can any of the company-specific risk be diversified away by investing in both Orascom Investment and Grand 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 Orascom Investment and Grand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Orascom Investment Holding and Grand Investment Capital, you can compare the effects of market volatilities on Orascom Investment and Grand 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 Orascom Investment with a short position of Grand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Investment and Grand Investment.

Diversification Opportunities for Orascom Investment and Grand Investment

0.05

Correlation Coefficient

Orascom Investment  Grand Investment

Significant diversification

The 3 months correlation between Orascom and Grand is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Investment Holding and Grand Investment Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Investment Capital and Orascom Investment 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 Investment Holding are associated (or correlated) with Grand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Investment Capital has no effect on the direction of Orascom Investment i.e., Orascom Investment and Grand Investment go up and down completely randomly.

Pair Corralation between Orascom Investment and Grand Investment

Assuming the 90 days trading horizon Orascom Investment Holding is expected to generate 2.51 times more return on investment than Grand Investment. However, Orascom Investment is 2.51 times more volatile than Grand Investment Capital. It trades about 0.34 of its potential returns per unit of risk. Grand Investment Capital is currently generating about 0.17 per unit of risk. If you would invest  45.00  in Orascom Investment Holding on September 22, 2024 and sell it today you would earn a total of  11.00  from holding Orascom Investment Holding or generate 24.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Orascom Investment Holding  vs.  Grand Investment Capital

Orascom Investment

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orascom Investment Holding are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Orascom Investment showed solid returns over the last few months and may actually be approaching a breakup point.

Grand Investment Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Investment Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Grand Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Orascom Investment and Grand Investment

The main advantage of trading using opposite Orascom Investment and Grand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Investment position performs unexpectedly, Grand 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 Grand Investment will offset losses from the drop in Grand Investment's long position.

The idea behind Orascom Investment Holding and Grand Investment Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.