Correlation Between Pfeiffer Vacuum and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Pfeiffer Vacuum and Cairo Communication 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 Pfeiffer Vacuum and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfeiffer Vacuum Technology and Cairo Communication SpA, you can compare the effects of market volatilities on Pfeiffer Vacuum and Cairo Communication 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 Pfeiffer Vacuum with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfeiffer Vacuum and Cairo Communication.
Diversification Opportunities for Pfeiffer Vacuum and Cairo Communication
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pfeiffer and Cairo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pfeiffer Vacuum Technology and Cairo Communication SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Communication SpA and Pfeiffer Vacuum 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 Pfeiffer Vacuum Technology are associated (or correlated) with Cairo Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Communication SpA has no effect on the direction of Pfeiffer Vacuum i.e., Pfeiffer Vacuum and Cairo Communication go up and down completely randomly.
Pair Corralation between Pfeiffer Vacuum and Cairo Communication
Assuming the 90 days trading horizon Pfeiffer Vacuum is expected to generate 3.53 times less return on investment than Cairo Communication. But when comparing it to its historical volatility, Pfeiffer Vacuum Technology is 3.42 times less risky than Cairo Communication. It trades about 0.1 of its potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 227.00 in Cairo Communication SpA on August 24, 2024 and sell it today you would earn a total of 8.00 from holding Cairo Communication SpA or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfeiffer Vacuum Technology vs. Cairo Communication SpA
Performance |
| Timeline |
| Pfeiffer Vacuum Tech |
| Cairo Communication SpA |
Pfeiffer Vacuum and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfeiffer Vacuum and Cairo Communication
The main advantage of trading using opposite Pfeiffer Vacuum and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfeiffer Vacuum position performs unexpectedly, Cairo Communication 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 Cairo Communication will offset losses from the drop in Cairo Communication's long position.| Pfeiffer Vacuum vs. Capital Drilling | Pfeiffer Vacuum vs. Air Products Chemicals | Pfeiffer Vacuum vs. Fidelity National Information | Pfeiffer Vacuum vs. Elmos Semiconductor SE |
| Cairo Communication vs. Quadrise Plc | Cairo Communication vs. Intuitive Investments Group | Cairo Communication vs. European Metals Holdings | Cairo Communication vs. Athelney Trust plc |
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 Correlations module to find global opportunities by holding instruments from different markets.
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