Correlation Between Zahraa Maadi and Orascom Investment
Can any of the company-specific risk be diversified away by investing in both Zahraa Maadi 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 Zahraa Maadi and Orascom Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zahraa Maadi Investment and Orascom Investment Holding, you can compare the effects of market volatilities on Zahraa Maadi 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 Zahraa Maadi with a short position of Orascom Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zahraa Maadi and Orascom Investment.
Diversification Opportunities for Zahraa Maadi and Orascom Investment
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zahraa and Orascom is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Zahraa Maadi Investment and Orascom Investment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orascom Investment and Zahraa Maadi 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 Zahraa Maadi Investment 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 Zahraa Maadi i.e., Zahraa Maadi and Orascom Investment go up and down completely randomly.
Pair Corralation between Zahraa Maadi and Orascom Investment
Assuming the 90 days trading horizon Zahraa Maadi is expected to generate 10.03 times less return on investment than Orascom Investment. But when comparing it to its historical volatility, Zahraa Maadi Investment is 1.38 times less risky than Orascom Investment. It trades about 0.03 of its potential returns per unit of risk. Orascom Investment Holding is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Orascom Investment Holding on September 15, 2024 and sell it today you would earn a total of 13.00 from holding Orascom Investment Holding or generate 31.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Zahraa Maadi Investment vs. Orascom Investment Holding
Performance |
Timeline |
Zahraa Maadi Investment |
Orascom Investment |
Zahraa Maadi and Orascom Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zahraa Maadi and Orascom Investment
The main advantage of trading using opposite Zahraa Maadi and Orascom Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zahraa Maadi 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.Zahraa Maadi vs. Paint Chemicals Industries | Zahraa Maadi vs. Reacap Financial Investments | Zahraa Maadi vs. Egyptians For Investment | Zahraa Maadi vs. Misr Oils Soap |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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