Correlation Between TGCC SA and MAROC LEASING

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

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

Diversification Opportunities for TGCC SA and MAROC LEASING

0.57

Correlation Coefficient

TGCC SA  MAROC LEASING

Very weak diversification

The 3 months correlation between TGCC and MAROC is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding TGCC SA and MAROC LEASING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAROC LEASING and TGCC SA 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 TGCC SA are associated (or correlated) with MAROC LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAROC LEASING has no effect on the direction of TGCC SA i.e., TGCC SA and MAROC LEASING go up and down completely randomly.

Pair Corralation between TGCC SA and MAROC LEASING

Assuming the 90 days trading horizon TGCC SA is expected to generate 1.42 times more return on investment than MAROC LEASING. However, TGCC SA is 1.42 times more volatile than MAROC LEASING. It trades about 0.23 of its potential returns per unit of risk. MAROC LEASING is currently generating about 0.05 per unit of risk. If you would invest  37,160  in TGCC SA on September 12, 2024 and sell it today you would earn a total of  10,400  from holding TGCC SA or generate 27.99% return on investment over 90 days.

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

TGCC SA  vs.  MAROC LEASING

TGCC SA

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TGCC SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, TGCC SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

MAROC LEASING

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MAROC LEASING are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, MAROC LEASING is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with TGCC SA and MAROC LEASING

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

The idea behind TGCC SA and MAROC LEASING 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.