Correlation Between MICRODATA and ATTIJARIWAFA BANK

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

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

Diversification Opportunities for MICRODATA and ATTIJARIWAFA BANK

-0.11

Correlation Coefficient

MICRODATA  ATTIJARIWAFA BANK

Good diversification

The 3 months correlation between MICRODATA and ATTIJARIWAFA is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding MICRODATA and ATTIJARIWAFA BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATTIJARIWAFA BANK and MICRODATA 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 MICRODATA are associated (or correlated) with ATTIJARIWAFA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATTIJARIWAFA BANK has no effect on the direction of MICRODATA i.e., MICRODATA and ATTIJARIWAFA BANK go up and down completely randomly.

Pair Corralation between MICRODATA and ATTIJARIWAFA BANK

Assuming the 90 days trading horizon MICRODATA is expected to generate 2.61 times less return on investment than ATTIJARIWAFA BANK. In addition to that, MICRODATA is 1.3 times more volatile than ATTIJARIWAFA BANK. It trades about 0.02 of its total potential returns per unit of risk. ATTIJARIWAFA BANK is currently generating about 0.08 per unit of volatility. If you would invest  53,950  in ATTIJARIWAFA BANK on September 13, 2024 and sell it today you would earn a total of  3,380  from holding ATTIJARIWAFA BANK or generate 6.27% return on investment over 90 days.

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

MICRODATA  vs.  ATTIJARIWAFA BANK

MICRODATA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MICRODATA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, MICRODATA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ATTIJARIWAFA BANK

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATTIJARIWAFA BANK are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, ATTIJARIWAFA BANK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with MICRODATA and ATTIJARIWAFA BANK

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

The idea behind MICRODATA and ATTIJARIWAFA BANK 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.