Correlation Between Orascom Investment and Al Baraka

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

Diversification Opportunities for Orascom Investment and Al Baraka

0.05

Correlation Coefficient

Orascom Investment  Al Baraka

Significant diversification

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

Pair Corralation between Orascom Investment and Al Baraka

Assuming the 90 days trading horizon Orascom Investment Holding is expected to generate 2.56 times more return on investment than Al Baraka. However, Orascom Investment is 2.56 times more volatile than Al Baraka Bank. It trades about 0.37 of its potential returns per unit of risk. Al Baraka Bank is currently generating about 0.14 per unit of risk. If you would invest  69.00  in Orascom Investment Holding on April 24, 2025 and sell it today you would earn a total of  51.00  from holding Orascom Investment Holding or generate 73.91% 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.  Al Baraka Bank

Orascom Investment

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Orascom Investment Holding are ranked lower than 29 (%) 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.

Al Baraka Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Al Baraka Bank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Al Baraka may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Orascom Investment and Al Baraka

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

The idea behind Orascom Investment Holding and Al Baraka Bank 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.