Correlation Between Orascom Financial and National Bank
Can any of the company-specific risk be diversified away by investing in both Orascom Financial and National Bank 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 Financial and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orascom Financial Holding and National Bank, you can compare the effects of market volatilities on Orascom Financial and National Bank 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 Financial with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orascom Financial and National Bank.
Diversification Opportunities for Orascom Financial and National Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Orascom and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Orascom Financial Holding and National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and Orascom Financial 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 Financial Holding are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Orascom Financial i.e., Orascom Financial and National Bank go up and down completely randomly.
Pair Corralation between Orascom Financial and National Bank
Assuming the 90 days trading horizon Orascom Financial Holding is expected to generate 2.12 times more return on investment than National Bank. However, Orascom Financial is 2.12 times more volatile than National Bank. It trades about 0.07 of its potential returns per unit of risk. National Bank is currently generating about -0.05 per unit of risk. If you would invest 21.00 in Orascom Financial Holding on January 23, 2025 and sell it today you would earn a total of 23.00 from holding Orascom Financial Holding or generate 109.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orascom Financial Holding vs. National Bank
Performance |
| Timeline |
| Orascom Financial Holding |
| National Bank |
Orascom Financial and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orascom Financial and National Bank
The main advantage of trading using opposite Orascom Financial and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orascom Financial position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Orascom Financial vs. Atlas For Investment | Orascom Financial vs. Misr Chemical Industries | Orascom Financial vs. Cleopatra Hospital | Orascom Financial vs. Telecom Egypt |
| National Bank vs. Speed Medical | National Bank vs. Cairo Educational Services | National Bank vs. Edita Food Industries | National Bank vs. Cleopatra Hospital |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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