Correlation Between MAGHREB OXYGENE and MAROC LEASING

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

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

Diversification Opportunities for MAGHREB OXYGENE and MAROC LEASING

0.39

Correlation Coefficient

MAGHREB OXYGENE  MAROC LEASING

Weak diversification

The 3 months correlation between MAGHREB and MAROC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MAGHREB OXYGENE and MAROC LEASING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAROC LEASING 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 MAROC LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAROC LEASING has no effect on the direction of MAGHREB OXYGENE i.e., MAGHREB OXYGENE and MAROC LEASING go up and down completely randomly.

Pair Corralation between MAGHREB OXYGENE and MAROC LEASING

Assuming the 90 days trading horizon MAGHREB OXYGENE is expected to generate 2.7 times more return on investment than MAROC LEASING. However, MAGHREB OXYGENE is 2.7 times more volatile than MAROC LEASING. It trades about 0.1 of its potential returns per unit of risk. MAROC LEASING is currently generating about 0.05 per unit of risk. 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

MAGHREB OXYGENE  vs.  MAROC LEASING

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.

MAROC LEASING

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MAROC LEASING are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, MAROC LEASING is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MAGHREB OXYGENE and MAROC LEASING

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

The idea behind MAGHREB OXYGENE and MAROC LEASING 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.