Correlation Between AGMA LAHLOU and MINIERE TOUISSIT

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

Diversification Opportunities for AGMA LAHLOU and MINIERE TOUISSIT

0.4

Correlation Coefficient

AGMA LAHLOU  MINIERE TOUISSIT

Very weak diversification

The 3 months correlation between AGMA and MINIERE is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AGMA LAHLOU TAZI and MINIERE TOUISSIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINIERE TOUISSIT 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 MINIERE TOUISSIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINIERE TOUISSIT has no effect on the direction of AGMA LAHLOU i.e., AGMA LAHLOU and MINIERE TOUISSIT go up and down completely randomly.

Pair Corralation between AGMA LAHLOU and MINIERE TOUISSIT

Assuming the 90 days trading horizon AGMA LAHLOU is expected to generate 17.18 times less return on investment than MINIERE TOUISSIT. But when comparing it to its historical volatility, AGMA LAHLOU TAZI is 1.48 times less risky than MINIERE TOUISSIT. It trades about 0.01 of its potential returns per unit of risk. MINIERE TOUISSIT is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  130,000  in MINIERE TOUISSIT on December 4, 2024 and sell it today you would earn a total of  45,000  from holding MINIERE TOUISSIT or generate 34.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.58%
Values	Daily Returns

AGMA LAHLOU TAZI  vs.  MINIERE TOUISSIT

AGMA LAHLOU TAZI

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGMA LAHLOU TAZI are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, AGMA LAHLOU may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MINIERE TOUISSIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MINIERE TOUISSIT are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, MINIERE TOUISSIT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with AGMA LAHLOU and MINIERE TOUISSIT

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

The idea behind AGMA LAHLOU TAZI and MINIERE TOUISSIT 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.