Correlation Between Orascom Investment and B Investments

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

Diversification Opportunities for Orascom Investment and B Investments

-0.25

Correlation Coefficient

Orascom Investment  B Investments

Very good diversification

The 3 months correlation between Orascom and BINV is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Investment Holding and B Investments Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Investments Holding 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 B Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Investments Holding has no effect on the direction of Orascom Investment i.e., Orascom Investment and B Investments go up and down completely randomly.

Pair Corralation between Orascom Investment and B Investments

Assuming the 90 days trading horizon Orascom Investment Holding is expected to generate 1.45 times more return on investment than B Investments. However, Orascom Investment is 1.45 times more volatile than B Investments Holding. It trades about 0.08 of its potential returns per unit of risk. B Investments Holding is currently generating about -0.18 per unit of risk. If you would invest  50.00  in Orascom Investment Holding on December 11, 2024 and sell it today you would earn a total of  3.00  from holding Orascom Investment Holding or generate 6.0% return on investment over 90 days.

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

Orascom Investment Holding  vs.  B Investments Holding

Orascom Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Orascom Investment Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Orascom Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

B Investments Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days B Investments Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Orascom Investment and B Investments

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

The idea behind Orascom Investment Holding and B Investments 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.