Correlation Between AGMA LAHLOU and MAGHREBAIL

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

Diversification Opportunities for AGMA LAHLOU and MAGHREBAIL

-0.08

Correlation Coefficient

AGMA LAHLOU  MAGHREBAIL

Good diversification

The 3 months correlation between AGMA and MAGHREBAIL is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AGMA LAHLOU TAZI and MAGHREBAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGHREBAIL 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 MAGHREBAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGHREBAIL has no effect on the direction of AGMA LAHLOU i.e., AGMA LAHLOU and MAGHREBAIL go up and down completely randomly.

Pair Corralation between AGMA LAHLOU and MAGHREBAIL

Assuming the 90 days trading horizon AGMA LAHLOU TAZI is expected to under-perform the MAGHREBAIL. In addition to that, AGMA LAHLOU is 1.12 times more volatile than MAGHREBAIL. It trades about -0.14 of its total potential returns per unit of risk. MAGHREBAIL is currently generating about -0.04 per unit of volatility. If you would invest  94,600  in MAGHREBAIL on September 15, 2024 and sell it today you would lose (1,800) from holding MAGHREBAIL or give up 1.9% of portfolio value over 90 days.

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

AGMA LAHLOU TAZI  vs.  MAGHREBAIL

AGMA LAHLOU TAZI

Risk-Adjusted Performance

0 of 100

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.

MAGHREBAIL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAGHREBAIL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, MAGHREBAIL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AGMA LAHLOU and MAGHREBAIL

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

The idea behind AGMA LAHLOU TAZI and MAGHREBAIL 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.