Correlation Between MAGHREB OXYGENE and HIGHTECH PAYMENT

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

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

Diversification Opportunities for MAGHREB OXYGENE and HIGHTECH PAYMENT

-0.45

Correlation Coefficient

MAGHREB OXYGENE  HIGHTECH PAYMENT

Very good diversification

The 3 months correlation between MAGHREB and HIGHTECH is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding MAGHREB OXYGENE and HIGHTECH PAYMENT SYSTEMS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIGHTECH PAYMENT SYSTEMS and MAGHREB OXYGENE 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 MAGHREB OXYGENE are associated (or correlated) with HIGHTECH PAYMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIGHTECH PAYMENT SYSTEMS has no effect on the direction of MAGHREB OXYGENE i.e., MAGHREB OXYGENE and HIGHTECH PAYMENT go up and down completely randomly.

Pair Corralation between MAGHREB OXYGENE and HIGHTECH PAYMENT

Assuming the 90 days trading horizon MAGHREB OXYGENE is expected to generate 2.64 times more return on investment than HIGHTECH PAYMENT. However, MAGHREB OXYGENE is 2.64 times more volatile than HIGHTECH PAYMENT SYSTEMS. It trades about 0.07 of its potential returns per unit of risk. HIGHTECH PAYMENT SYSTEMS is currently generating about -0.08 per unit of risk. If you would invest  22,200  in MAGHREB OXYGENE on September 5, 2024 and sell it today you would earn a total of  2,800  from holding MAGHREB OXYGENE or generate 12.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

MAGHREB OXYGENE  vs.  HIGHTECH PAYMENT SYSTEMS

MAGHREB OXYGENE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MAGHREB OXYGENE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile technical and fundamental indicators, MAGHREB OXYGENE sustained solid returns over the last few months and may actually be approaching a breakup point.

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 latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with MAGHREB OXYGENE and HIGHTECH PAYMENT

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

The idea behind MAGHREB OXYGENE and HIGHTECH PAYMENT SYSTEMS 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..