Correlation Between Al Tawfeek and Extracted Oils

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

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

Diversification Opportunities for Al Tawfeek and Extracted Oils

0.42

Correlation Coefficient

Al Tawfeek  Extracted Oils

Very weak diversification

The 3 months correlation between ATLC and Extracted is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Al Tawfeek Leasing and Extracted Oils in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extracted Oils and Al Tawfeek 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 Al Tawfeek Leasing are associated (or correlated) with Extracted Oils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extracted Oils has no effect on the direction of Al Tawfeek i.e., Al Tawfeek and Extracted Oils go up and down completely randomly.

Pair Corralation between Al Tawfeek and Extracted Oils

Assuming the 90 days trading horizon Al Tawfeek Leasing is expected to under-perform the Extracted Oils. In addition to that, Al Tawfeek is 1.77 times more volatile than Extracted Oils. It trades about -0.03 of its total potential returns per unit of risk. Extracted Oils is currently generating about 0.07 per unit of volatility. If you would invest  334.00  in Extracted Oils on April 22, 2025 and sell it today you would earn a total of  25.00  from holding Extracted Oils or generate 7.49% return on investment over 90 days.

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

Al Tawfeek Leasing  vs.  Extracted Oils

Al Tawfeek Leasing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Al Tawfeek Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Extracted Oils

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Extracted Oils are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Extracted Oils may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Al Tawfeek and Extracted Oils

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

The idea behind Al Tawfeek Leasing and Extracted Oils 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.