Correlation Between Barakah Offshore and Al Aqar

Can any of the company-specific risk be diversified away by investing in both Barakah Offshore and Al Aqar 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 Barakah Offshore and Al Aqar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barakah Offshore Petroleum and Al Aqar Healthcare, you can compare the effects of market volatilities on Barakah Offshore and Al Aqar 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 Barakah Offshore with a short position of Al Aqar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barakah Offshore and Al Aqar.

Diversification Opportunities for Barakah Offshore and Al Aqar

-0.13

Correlation Coefficient

Barakah Offshore  Al Aqar

Good diversification

The 3 months correlation between Barakah and 5116 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Barakah Offshore Petroleum and Al Aqar Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Aqar Healthcare and Barakah Offshore 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 Barakah Offshore Petroleum are associated (or correlated) with Al Aqar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Aqar Healthcare has no effect on the direction of Barakah Offshore i.e., Barakah Offshore and Al Aqar go up and down completely randomly.

Pair Corralation between Barakah Offshore and Al Aqar

Assuming the 90 days trading horizon Barakah Offshore Petroleum is expected to generate 10.41 times more return on investment than Al Aqar. However, Barakah Offshore is 10.41 times more volatile than Al Aqar Healthcare. It trades about 0.04 of its potential returns per unit of risk. Al Aqar Healthcare is currently generating about 0.09 per unit of risk. If you would invest  5.00  in Barakah Offshore Petroleum on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Barakah Offshore Petroleum or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Barakah Offshore Petroleum  vs.  Al Aqar Healthcare

Barakah Offshore Pet

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Barakah Offshore Petroleum are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Barakah Offshore disclosed solid returns over the last few months and may actually be approaching a breakup point.

Al Aqar Healthcare

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Al Aqar Healthcare are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Al Aqar is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Barakah Offshore and Al Aqar

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

The idea behind Barakah Offshore Petroleum and Al Aqar Healthcare 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.