Correlation Between AGMA LAHLOU and SALAFIN

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

Diversification Opportunities for AGMA LAHLOU and SALAFIN

0.26

Correlation Coefficient

AGMA LAHLOU  SALAFIN

Modest diversification

The 3 months correlation between AGMA and SALAFIN is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AGMA LAHLOU TAZI and SALAFIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SALAFIN 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 SALAFIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SALAFIN has no effect on the direction of AGMA LAHLOU i.e., AGMA LAHLOU and SALAFIN go up and down completely randomly.

Pair Corralation between AGMA LAHLOU and SALAFIN

Assuming the 90 days trading horizon AGMA LAHLOU TAZI is expected to generate 0.53 times more return on investment than SALAFIN. However, AGMA LAHLOU TAZI is 1.88 times less risky than SALAFIN. It trades about 0.22 of its potential returns per unit of risk. SALAFIN is currently generating about -0.09 per unit of risk. If you would invest  648,600  in AGMA LAHLOU TAZI on October 10, 2024 and sell it today you would earn a total of  38,600  from holding AGMA LAHLOU TAZI or generate 5.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AGMA LAHLOU TAZI  vs.  SALAFIN

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 rather sound fundamental indicators, AGMA LAHLOU is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SALAFIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SALAFIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, SALAFIN is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AGMA LAHLOU and SALAFIN

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

The idea behind AGMA LAHLOU TAZI and SALAFIN 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.