Correlation Between MAROC TELECOM and ArcelorMittal

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

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

Diversification Opportunities for MAROC TELECOM and ArcelorMittal

-0.52

Correlation Coefficient

MAROC TELECOM  ArcelorMittal

Excellent diversification

The 3 months correlation between MAROC and ArcelorMittal is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding MAROC TELECOM and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of MAROC TELECOM i.e., MAROC TELECOM and ArcelorMittal go up and down completely randomly.

Pair Corralation between MAROC TELECOM and ArcelorMittal

Assuming the 90 days trading horizon MAROC TELECOM is expected to generate 4.33 times more return on investment than ArcelorMittal. However, MAROC TELECOM is 4.33 times more volatile than ArcelorMittal SA. It trades about 0.09 of its potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.03 per unit of risk. If you would invest  405.00  in MAROC TELECOM on October 4, 2024 and sell it today you would earn a total of  375.00  from holding MAROC TELECOM or generate 92.59% return on investment over 90 days.

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

MAROC TELECOM  vs.  ArcelorMittal SA

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.

ArcelorMittal SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ArcelorMittal SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ArcelorMittal is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MAROC TELECOM and ArcelorMittal

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

The idea behind MAROC TELECOM and ArcelorMittal SA 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.