Correlation Between Sligro Food and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Sligro Food 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 Sligro Food and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and Cairo Communication SpA, you can compare the effects of market volatilities on Sligro Food 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 Sligro Food with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Cairo Communication.
Diversification Opportunities for Sligro Food and Cairo Communication
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sligro and Cairo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group 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 Sligro Food 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 Sligro Food Group 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 Sligro Food i.e., Sligro Food and Cairo Communication go up and down completely randomly.
Pair Corralation between Sligro Food and Cairo Communication
Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Cairo Communication. But the stock apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 1.35 times less risky than Cairo Communication. The stock trades about -0.05 of its potential returns per unit of risk. The Cairo Communication SpA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Cairo Communication SpA on September 2, 2024 and sell it today you would earn a total of 106.00 from holding Cairo Communication SpA or generate 81.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. Cairo Communication SpA
Performance |
| Timeline |
| Sligro Food Group |
| Cairo Communication SpA |
Sligro Food and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Cairo Communication
The main advantage of trading using opposite Sligro Food and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food 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.| Sligro Food vs. Uniper SE | Sligro Food vs. Mulberry Group PLC | Sligro Food vs. London Security Plc | Sligro Food vs. Triad Group PLC |
| Cairo Communication vs. Uniper SE | Cairo Communication vs. Mulberry Group PLC | Cairo Communication vs. London Security Plc | Cairo Communication vs. Triad Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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