Correlation Between MAROC TELECOM and ATT

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

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

Diversification Opportunities for MAROC TELECOM and ATT

-0.25

Correlation Coefficient

MAROC TELECOM  ATT

Very good diversification

The 3 months correlation between MAROC and ATT is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding MAROC TELECOM and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and MAROC TELECOM 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 MAROC TELECOM are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of MAROC TELECOM i.e., MAROC TELECOM and ATT go up and down completely randomly.

Pair Corralation between MAROC TELECOM and ATT

Assuming the 90 days trading horizon MAROC TELECOM is expected to generate 6.12 times less return on investment than ATT. But when comparing it to its historical volatility, MAROC TELECOM is 1.21 times less risky than ATT. It trades about 0.04 of its potential returns per unit of risk. ATT Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,904  in ATT Inc on September 20, 2024 and sell it today you would earn a total of  272.00  from holding ATT Inc or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

MAROC TELECOM  vs.  ATT Inc

MAROC TELECOM

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MAROC TELECOM are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MAROC TELECOM is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ATT Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ATT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MAROC TELECOM and ATT

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

The idea behind MAROC TELECOM and ATT Inc 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.