Correlation Between TGCC SA and AGMA LAHLOU

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

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

Diversification Opportunities for TGCC SA and AGMA LAHLOU

-0.58

Correlation Coefficient

TGCC SA  AGMA LAHLOU

Excellent diversification

The 3 months correlation between TGCC and AGMA is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding TGCC SA and AGMA LAHLOU TAZI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGMA LAHLOU TAZI and TGCC SA 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 TGCC SA are associated (or correlated) with AGMA LAHLOU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGMA LAHLOU TAZI has no effect on the direction of TGCC SA i.e., TGCC SA and AGMA LAHLOU go up and down completely randomly.

Pair Corralation between TGCC SA and AGMA LAHLOU

Assuming the 90 days trading horizon TGCC SA is expected to generate 1.35 times more return on investment than AGMA LAHLOU. However, TGCC SA is 1.35 times more volatile than AGMA LAHLOU TAZI. It trades about 0.13 of its potential returns per unit of risk. AGMA LAHLOU TAZI is currently generating about -0.22 per unit of risk. If you would invest  45,520  in TGCC SA on September 12, 2024 and sell it today you would earn a total of  2,040  from holding TGCC SA or generate 4.48% return on investment over 90 days.

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

TGCC SA  vs.  AGMA LAHLOU TAZI

TGCC SA

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TGCC SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, TGCC SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

AGMA LAHLOU TAZI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGMA LAHLOU TAZI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental 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 TGCC SA and AGMA LAHLOU

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

The idea behind TGCC SA and AGMA LAHLOU TAZI 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..