Correlation Between INTERSHOP Communications and MAROC TELECOM

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

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

Diversification Opportunities for INTERSHOP Communications and MAROC TELECOM

0.28

Correlation Coefficient

INTERSHOP Communications  MAROC TELECOM

Modest diversification

The 3 months correlation between INTERSHOP and MAROC is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding INTERSHOP Communications Aktie and MAROC TELECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAROC TELECOM and INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft 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 INTERSHOP Communications i.e., INTERSHOP Communications and MAROC TELECOM go up and down completely randomly.

Pair Corralation between INTERSHOP Communications and MAROC TELECOM

Assuming the 90 days trading horizon INTERSHOP Communications Aktiengesellschaft is expected to generate 2.0 times more return on investment than MAROC TELECOM. However, INTERSHOP Communications is 2.0 times more volatile than MAROC TELECOM. It trades about -0.04 of its potential returns per unit of risk. MAROC TELECOM is currently generating about -0.15 per unit of risk. If you would invest  193.00  in INTERSHOP Communications Aktiengesellschaft on September 12, 2024 and sell it today you would lose (3.00) from holding INTERSHOP Communications Aktiengesellschaft or give up 1.55% of portfolio value over 90 days.

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

INTERSHOP Communications Aktie  vs.  MAROC TELECOM

INTERSHOP Communications

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in INTERSHOP Communications Aktiengesellschaft are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, INTERSHOP Communications exhibited solid returns over the last few months and may actually be approaching a breakup point.

MAROC TELECOM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAROC TELECOM has generated negative risk-adjusted returns adding no value to investors with long positions. 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 INTERSHOP Communications and MAROC TELECOM

The main advantage of trading using opposite INTERSHOP Communications and MAROC TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.