Correlation Between MAGHREB OXYGENE and MICRODATA

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

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

Diversification Opportunities for MAGHREB OXYGENE and MICRODATA

0.69

Correlation Coefficient

MAGHREB OXYGENE  MICRODATA

Poor diversification

The 3 months correlation between MAGHREB and MICRODATA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding MAGHREB OXYGENE and MICRODATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICRODATA 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 MICRODATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICRODATA has no effect on the direction of MAGHREB OXYGENE i.e., MAGHREB OXYGENE and MICRODATA go up and down completely randomly.

Pair Corralation between MAGHREB OXYGENE and MICRODATA

Assuming the 90 days trading horizon MAGHREB OXYGENE is expected to generate 1.65 times more return on investment than MICRODATA. However, MAGHREB OXYGENE is 1.65 times more volatile than MICRODATA. It trades about 0.24 of its potential returns per unit of risk. MICRODATA is currently generating about 0.17 per unit of risk. If you would invest  24,505  in MAGHREB OXYGENE on December 30, 2024 and sell it today you would earn a total of  20,795  from holding MAGHREB OXYGENE or generate 84.86% return on investment over 90 days.

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

MAGHREB OXYGENE  vs.  MICRODATA

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 unfluctuating technical and fundamental indicators, MAGHREB OXYGENE sustained solid returns over the last few months and may actually be approaching a breakup point.

MICRODATA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MICRODATA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, MICRODATA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MAGHREB OXYGENE and MICRODATA

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

The idea behind MAGHREB OXYGENE and MICRODATA 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.