Correlation Between SmarTone Telecommunicatio and MAROC TELECOM

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

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

Diversification Opportunities for SmarTone Telecommunicatio and MAROC TELECOM

0.3

Correlation Coefficient

SmarTone Telecommunicatio  MAROC TELECOM

Weak diversification

The 3 months correlation between SmarTone and MAROC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SmarTone Telecommunications Ho and MAROC TELECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAROC TELECOM and SmarTone Telecommunicatio 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 SmarTone Telecommunications Holdings 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 SmarTone Telecommunicatio i.e., SmarTone Telecommunicatio and MAROC TELECOM go up and down completely randomly.

Pair Corralation between SmarTone Telecommunicatio and MAROC TELECOM

Assuming the 90 days horizon SmarTone Telecommunicatio is expected to generate 1.05 times less return on investment than MAROC TELECOM. In addition to that, SmarTone Telecommunicatio is 1.08 times more volatile than MAROC TELECOM. It trades about 0.08 of its total potential returns per unit of risk. MAROC TELECOM is currently generating about 0.09 per unit of volatility. If you would invest  990.00  in MAROC TELECOM on April 24, 2025 and sell it today you would earn a total of  70.00  from holding MAROC TELECOM or generate 7.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

SmarTone Telecommunications Ho  vs.  MAROC TELECOM

SmarTone Telecommunicatio

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SmarTone Telecommunications Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SmarTone Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in August 2025.

MAROC TELECOM

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MAROC TELECOM are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, MAROC TELECOM may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SmarTone Telecommunicatio and MAROC TELECOM

The main advantage of trading using opposite SmarTone Telecommunicatio and MAROC TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmarTone Telecommunicatio 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 SmarTone Telecommunications Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.