Correlation Between FAST RETAIL and MAROC TELECOM

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

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

Diversification Opportunities for FAST RETAIL and MAROC TELECOM

-0.22

Correlation Coefficient

FAST RETAIL  MAROC TELECOM

Very good diversification

The 3 months correlation between FAST and MAROC is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and MAROC TELECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAROC TELECOM and FAST RETAIL 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 FAST RETAIL ADR are associated (or correlated) with MAROC TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAROC TELECOM has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and MAROC TELECOM go up and down completely randomly.

Pair Corralation between FAST RETAIL and MAROC TELECOM

Assuming the 90 days trading horizon FAST RETAIL is expected to generate 1.59 times less return on investment than MAROC TELECOM. But when comparing it to its historical volatility, FAST RETAIL ADR is 2.21 times less risky than MAROC TELECOM. It trades about 0.07 of its potential returns per unit of risk. MAROC TELECOM is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  337.00  in MAROC TELECOM on October 4, 2024 and sell it today you would earn a total of  443.00  from holding MAROC TELECOM or generate 131.45% return on investment over 90 days.

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

FAST RETAIL ADR  vs.  MAROC TELECOM

FAST RETAIL ADR

Risk-Adjusted Performance

5 of 100

Modest

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

MAROC TELECOM

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MAROC TELECOM are ranked lower than 2 (%) 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.

Pair Trading with FAST RETAIL and MAROC TELECOM

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

The idea behind FAST RETAIL ADR and MAROC TELECOM 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.