Correlation Between AGMA LAHLOU and HIGHTECH PAYMENT

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Can any of the company-specific risk be diversified away by investing in both AGMA LAHLOU and HIGHTECH PAYMENT 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 AGMA LAHLOU and HIGHTECH PAYMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGMA LAHLOU TAZI and HIGHTECH PAYMENT SYSTEMS, you can compare the effects of market volatilities on AGMA LAHLOU and HIGHTECH PAYMENT 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 AGMA LAHLOU with a short position of HIGHTECH PAYMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGMA LAHLOU and HIGHTECH PAYMENT.

Diversification Opportunities for AGMA LAHLOU and HIGHTECH PAYMENT

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between AGMA and HIGHTECH is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding AGMA LAHLOU TAZI and HIGHTECH PAYMENT SYSTEMS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIGHTECH PAYMENT SYSTEMS and AGMA LAHLOU 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 AGMA LAHLOU TAZI are associated (or correlated) with HIGHTECH PAYMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIGHTECH PAYMENT SYSTEMS has no effect on the direction of AGMA LAHLOU i.e., AGMA LAHLOU and HIGHTECH PAYMENT go up and down completely randomly.

Pair Corralation between AGMA LAHLOU and HIGHTECH PAYMENT

Assuming the 90 days trading horizon AGMA LAHLOU TAZI is expected to under-perform the HIGHTECH PAYMENT. But the stock apears to be less risky and, when comparing its historical volatility, AGMA LAHLOU TAZI is 1.78 times less risky than HIGHTECH PAYMENT. The stock trades about -0.15 of its potential returns per unit of risk. The HIGHTECH PAYMENT SYSTEMS is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  57,710  in HIGHTECH PAYMENT SYSTEMS on September 12, 2024 and sell it today you would lose (3,210) from holding HIGHTECH PAYMENT SYSTEMS or give up 5.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

AGMA LAHLOU TAZI  vs.  HIGHTECH PAYMENT SYSTEMS

 Performance 
       Timeline  
AGMA LAHLOU TAZI 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days AGMA LAHLOU TAZI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
HIGHTECH PAYMENT SYSTEMS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HIGHTECH PAYMENT SYSTEMS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, HIGHTECH PAYMENT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

AGMA LAHLOU and HIGHTECH PAYMENT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AGMA LAHLOU and HIGHTECH PAYMENT

The main advantage of trading using opposite AGMA LAHLOU and HIGHTECH PAYMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGMA LAHLOU position performs unexpectedly, HIGHTECH PAYMENT 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 HIGHTECH PAYMENT will offset losses from the drop in HIGHTECH PAYMENT's long position.
The idea behind AGMA LAHLOU TAZI and HIGHTECH PAYMENT SYSTEMS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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