Correlation Between MAROC TELECOM and STMicroelectronics

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

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

Diversification Opportunities for MAROC TELECOM and STMicroelectronics

-0.28

Correlation Coefficient

MAROC TELECOM  STMicroelectronics

Very good diversification

The 3 months correlation between MAROC and STMicroelectronics is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding MAROC TELECOM and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics has no effect on the direction of MAROC TELECOM i.e., MAROC TELECOM and STMicroelectronics go up and down completely randomly.

Pair Corralation between MAROC TELECOM and STMicroelectronics

Assuming the 90 days trading horizon MAROC TELECOM is expected to generate 0.34 times more return on investment than STMicroelectronics. However, MAROC TELECOM is 2.91 times less risky than STMicroelectronics. It trades about 0.19 of its potential returns per unit of risk. STMicroelectronics NV is currently generating about -0.01 per unit of risk. If you would invest  940.00  in MAROC TELECOM on May 15, 2025 and sell it today you would earn a total of  140.00  from holding MAROC TELECOM or generate 14.89% return on investment over 90 days.

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

MAROC TELECOM  vs.  STMicroelectronics NV

MAROC TELECOM

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAROC TELECOM are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MAROC TELECOM unveiled solid returns over the last few months and may actually be approaching a breakup point.

STMicroelectronics

Risk-Adjusted Performance

Weakest

Over the last 90 days STMicroelectronics NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, STMicroelectronics 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 STMicroelectronics

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

The idea behind MAROC TELECOM and STMicroelectronics NV 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.