Correlation Between CFG BANK and AGMA LAHLOU

Can any of the company-specific risk be diversified away by investing in both CFG BANK and AGMA LAHLOU 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 CFG BANK and AGMA LAHLOU into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CFG BANK and AGMA LAHLOU TAZI, you can compare the effects of market volatilities on CFG BANK and AGMA LAHLOU 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 CFG BANK with a short position of AGMA LAHLOU. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFG BANK and AGMA LAHLOU.

Diversification Opportunities for CFG BANK and AGMA LAHLOU

-0.06

Correlation Coefficient

CFG BANK  AGMA LAHLOU

Good diversification

The 3 months correlation between CFG and AGMA is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding CFG BANK and AGMA LAHLOU TAZI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGMA LAHLOU TAZI and CFG BANK 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 CFG BANK are associated (or correlated) with AGMA LAHLOU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGMA LAHLOU TAZI has no effect on the direction of CFG BANK i.e., CFG BANK and AGMA LAHLOU go up and down completely randomly.

Pair Corralation between CFG BANK and AGMA LAHLOU

Assuming the 90 days trading horizon CFG BANK is expected to generate 0.76 times more return on investment than AGMA LAHLOU. However, CFG BANK is 1.31 times less risky than AGMA LAHLOU. It trades about 0.05 of its potential returns per unit of risk. AGMA LAHLOU TAZI is currently generating about 0.03 per unit of risk. If you would invest  21,500  in CFG BANK on December 27, 2024 and sell it today you would earn a total of  815.00  from holding CFG BANK or generate 3.79% return on investment over 90 days.

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

CFG BANK  vs.  AGMA LAHLOU TAZI

CFG BANK

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CFG BANK are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, CFG BANK is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

AGMA LAHLOU TAZI

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AGMA LAHLOU TAZI are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, AGMA LAHLOU is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CFG BANK and AGMA LAHLOU

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

The idea behind CFG BANK and AGMA LAHLOU TAZI 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.