Correlation Between Cairo Communication and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Austevoll Seafood 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 Cairo Communication and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairo Communication SpA and Austevoll Seafood ASA, you can compare the effects of market volatilities on Cairo Communication and Austevoll Seafood 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 Cairo Communication with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Austevoll Seafood.
Diversification Opportunities for Cairo Communication and Austevoll Seafood
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cairo and Austevoll is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA and Cairo Communication 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 Cairo Communication SpA are associated (or correlated) with Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of Cairo Communication i.e., Cairo Communication and Austevoll Seafood go up and down completely randomly.
Pair Corralation between Cairo Communication and Austevoll Seafood
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.4 times more return on investment than Austevoll Seafood. However, Cairo Communication is 1.4 times more volatile than Austevoll Seafood ASA. It trades about 0.1 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.12 per unit of risk. If you would invest 164.00 in Cairo Communication SpA on September 14, 2024 and sell it today you would earn a total of 91.00 from holding Cairo Communication SpA or generate 55.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. Austevoll Seafood ASA
Performance |
| Timeline |
| Cairo Communication SpA |
| Austevoll Seafood ASA |
Cairo Communication and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Austevoll Seafood
The main advantage of trading using opposite Cairo Communication and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Austevoll Seafood 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 Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.| Cairo Communication vs. Herald Investment Trust | Cairo Communication vs. The Mercantile Investment | Cairo Communication vs. Beeks Trading | Cairo Communication vs. Oakley Capital Investments |
| Austevoll Seafood vs. The Mercantile Investment | Austevoll Seafood vs. Edita Food Industries | Austevoll Seafood vs. Oakley Capital Investments | Austevoll Seafood vs. Ebro Foods |
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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