Correlation Between Cairo Communication and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Fresenius Medical 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 Fresenius Medical 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 Fresenius Medical Care, you can compare the effects of market volatilities on Cairo Communication and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Fresenius Medical.
Diversification Opportunities for Cairo Communication and Fresenius Medical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cairo and Fresenius is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Cairo Communication i.e., Cairo Communication and Fresenius Medical go up and down completely randomly.
Pair Corralation between Cairo Communication and Fresenius Medical
Assuming the 90 days trading horizon Cairo Communication is expected to generate 2.81 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, Cairo Communication SpA is 1.26 times less risky than Fresenius Medical. It trades about 0.09 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,875 in Fresenius Medical Care on August 27, 2024 and sell it today you would earn a total of 363.00 from holding Fresenius Medical Care or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. Fresenius Medical Care
Performance |
| Timeline |
| Cairo Communication SpA |
| Fresenius Medical Care |
Cairo Communication and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Fresenius Medical
The main advantage of trading using opposite Cairo Communication and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| Cairo Communication vs. Samsung Electronics Co | Cairo Communication vs. Samsung Electronics Co | Cairo Communication vs. Hyundai Motor | Cairo Communication vs. Toyota Motor Corp |
| Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Hyundai Motor | Fresenius Medical vs. Toyota Motor Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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