Correlation Between MAGHREB OXYGENE and M2M GROUP

Can any of the company-specific risk be diversified away by investing in both MAGHREB OXYGENE and M2M GROUP 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 M2M GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAGHREB OXYGENE and M2M GROUP, you can compare the effects of market volatilities on MAGHREB OXYGENE and M2M GROUP 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 M2M GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGHREB OXYGENE and M2M GROUP.

Diversification Opportunities for MAGHREB OXYGENE and M2M GROUP

-0.29

Correlation Coefficient

MAGHREB OXYGENE  M2M GROUP

Very good diversification

The 3 months correlation between MAGHREB and M2M is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding MAGHREB OXYGENE and M2M GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M2M GROUP 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 M2M GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M2M GROUP has no effect on the direction of MAGHREB OXYGENE i.e., MAGHREB OXYGENE and M2M GROUP go up and down completely randomly.

Pair Corralation between MAGHREB OXYGENE and M2M GROUP

Assuming the 90 days trading horizon MAGHREB OXYGENE is expected to generate 1.84 times more return on investment than M2M GROUP. However, MAGHREB OXYGENE is 1.84 times more volatile than M2M GROUP. It trades about 0.23 of its potential returns per unit of risk. M2M GROUP is currently generating about -0.04 per unit of risk. If you would invest  25,000  in MAGHREB OXYGENE on December 2, 2024 and sell it today you would earn a total of  19,000  from holding MAGHREB OXYGENE or generate 76.0% return on investment over 90 days.

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

MAGHREB OXYGENE  vs.  M2M GROUP

MAGHREB OXYGENE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MAGHREB OXYGENE are ranked lower than 18 (%) 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.

M2M GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days M2M GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, M2M GROUP is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MAGHREB OXYGENE and M2M GROUP

The main advantage of trading using opposite MAGHREB OXYGENE and M2M GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGHREB OXYGENE position performs unexpectedly, M2M GROUP 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 M2M GROUP will offset losses from the drop in M2M GROUP's long position.

The idea behind MAGHREB OXYGENE and M2M GROUP 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.