Correlation Between Orascom Construction and Ismailia Development

Can any of the company-specific risk be diversified away by investing in both Orascom Construction and Ismailia Development 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 Ismailia Development 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 Ismailia Development and, you can compare the effects of market volatilities on Orascom Construction and Ismailia Development 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 Ismailia Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Construction and Ismailia Development.

Diversification Opportunities for Orascom Construction and Ismailia Development

-0.4

Correlation Coefficient

Orascom Construction  Ismailia Development

Very good diversification

The 3 months correlation between Orascom and Ismailia is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Construction PLC and Ismailia Development and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ismailia Development and 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 Ismailia Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ismailia Development and has no effect on the direction of Orascom Construction i.e., Orascom Construction and Ismailia Development go up and down completely randomly.

Pair Corralation between Orascom Construction and Ismailia Development

Assuming the 90 days trading horizon Orascom Construction PLC is expected to under-perform the Ismailia Development. But the stock apears to be less risky and, when comparing its historical volatility, Orascom Construction PLC is 2.29 times less risky than Ismailia Development. The stock trades about -0.11 of its potential returns per unit of risk. The Ismailia Development and is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,406  in Ismailia Development and on October 20, 2024 and sell it today you would earn a total of  553.00  from holding Ismailia Development and or generate 39.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Orascom Construction PLC  vs.  Ismailia Development and

Orascom Construction PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orascom Construction PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ismailia Development and

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ismailia Development and are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Ismailia Development reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orascom Construction and Ismailia Development

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

The idea behind Orascom Construction PLC and Ismailia Development and 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.