Correlation Between HIGHTECH PAYMENT and MAGHREB OXYGENE

Can any of the company-specific risk be diversified away by investing in both HIGHTECH PAYMENT and MAGHREB OXYGENE 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 HIGHTECH PAYMENT and MAGHREB OXYGENE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HIGHTECH PAYMENT SYSTEMS and MAGHREB OXYGENE, you can compare the effects of market volatilities on HIGHTECH PAYMENT and MAGHREB OXYGENE 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 HIGHTECH PAYMENT with a short position of MAGHREB OXYGENE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIGHTECH PAYMENT and MAGHREB OXYGENE.

Diversification Opportunities for HIGHTECH PAYMENT and MAGHREB OXYGENE

-0.6

Correlation Coefficient

HIGHTECH PAYMENT  MAGHREB OXYGENE

Excellent diversification

The 3 months correlation between HIGHTECH and MAGHREB is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding HIGHTECH PAYMENT SYSTEMS and MAGHREB OXYGENE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGHREB OXYGENE and HIGHTECH PAYMENT 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 HIGHTECH PAYMENT SYSTEMS are associated (or correlated) with MAGHREB OXYGENE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGHREB OXYGENE has no effect on the direction of HIGHTECH PAYMENT i.e., HIGHTECH PAYMENT and MAGHREB OXYGENE go up and down completely randomly.

Pair Corralation between HIGHTECH PAYMENT and MAGHREB OXYGENE

Assuming the 90 days trading horizon HIGHTECH PAYMENT SYSTEMS is expected to under-perform the MAGHREB OXYGENE. But the stock apears to be less risky and, when comparing its historical volatility, HIGHTECH PAYMENT SYSTEMS is 2.54 times less risky than MAGHREB OXYGENE. The stock trades about -0.06 of its potential returns per unit of risk. The MAGHREB OXYGENE is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  21,600  in MAGHREB OXYGENE on September 12, 2024 and sell it today you would earn a total of  3,900  from holding MAGHREB OXYGENE or generate 18.06% return on investment over 90 days.

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

HIGHTECH PAYMENT SYSTEMS  vs.  MAGHREB OXYGENE

HIGHTECH PAYMENT SYSTEMS

Risk-Adjusted Performance

0 of 100

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.

MAGHREB OXYGENE

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MAGHREB OXYGENE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, MAGHREB OXYGENE sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HIGHTECH PAYMENT and MAGHREB OXYGENE

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

The idea behind HIGHTECH PAYMENT SYSTEMS and MAGHREB OXYGENE 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.