Correlation Between National Bank and Orascom Investment

Can any of the company-specific risk be diversified away by investing in both National 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 National 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 National Bank and Orascom Investment Holding, you can compare the effects of market volatilities on National 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 National Bank with a short position of Orascom Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Orascom Investment.

Diversification Opportunities for National Bank and Orascom Investment

0.0

Correlation Coefficient

National Bank  Orascom Investment

Pay attention - limited upside

The 3 months correlation between National and Orascom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National 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 National 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 National 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 National Bank i.e., National Bank and Orascom Investment go up and down completely randomly.

Pair Corralation between National Bank and Orascom Investment

If you would invest  56.00  in Orascom Investment Holding on December 29, 2024 and sell it today you would earn a total of  10.00  from holding Orascom Investment Holding or generate 17.86% return on investment over 90 days.

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

National Bank  vs.  Orascom Investment Holding

National Bank

Risk-Adjusted Performance

Very Weak

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

Orascom Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orascom Investment Holding are ranked lower than 9 (%) 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.

Pair Trading with National Bank and Orascom Investment

The main advantage of trading using opposite National Bank and Orascom Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National 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.

The idea behind National Bank and Orascom Investment Holding 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.