Correlation Between MAROC TELECOM and InPlay Oil

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

By analyzing existing cross correlation between MAROC TELECOM and InPlay Oil Corp, you can compare the effects of market volatilities on MAROC TELECOM and InPlay Oil 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 InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAROC TELECOM and InPlay Oil.

Diversification Opportunities for MAROC TELECOM and InPlay Oil

0.22

Correlation Coefficient

MAROC TELECOM  InPlay Oil

Modest diversification

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

Pair Corralation between MAROC TELECOM and InPlay Oil

Assuming the 90 days trading horizon MAROC TELECOM is expected to generate 185.7 times less return on investment than InPlay Oil. But when comparing it to its historical volatility, MAROC TELECOM is 6.17 times less risky than InPlay Oil. It trades about 0.0 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  114.00  in InPlay Oil Corp on October 6, 2024 and sell it today you would earn a total of  6.00  from holding InPlay Oil Corp or generate 5.26% return on investment over 90 days.

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

MAROC TELECOM  vs.  InPlay Oil Corp

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.

InPlay Oil Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days InPlay Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with MAROC TELECOM and InPlay Oil

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

The idea behind MAROC TELECOM and InPlay Oil Corp 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.