Correlation Between Cairo Communication and Boston Properties
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Boston Properties 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 Boston Properties 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 Boston Properties, you can compare the effects of market volatilities on Cairo Communication and Boston Properties 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 Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Boston Properties.
Diversification Opportunities for Cairo Communication and Boston Properties
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cairo and Boston is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties 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 Boston Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Properties has no effect on the direction of Cairo Communication i.e., Cairo Communication and Boston Properties go up and down completely randomly.
Pair Corralation between Cairo Communication and Boston Properties
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 0.73 times more return on investment than Boston Properties. However, Cairo Communication SpA is 1.37 times less risky than Boston Properties. It trades about 0.08 of its potential returns per unit of risk. Boston Properties is currently generating about 0.05 per unit of risk. If you would invest 158.00 in Cairo Communication SpA on September 12, 2024 and sell it today you would earn a total of 89.00 from holding Cairo Communication SpA or generate 56.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
Cairo Communication SpA vs. Boston Properties
Performance |
| Timeline |
| Cairo Communication SpA |
| Boston Properties |
Cairo Communication and Boston Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Boston Properties
The main advantage of trading using opposite Cairo Communication and Boston Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Boston Properties 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 Boston Properties will offset losses from the drop in Boston Properties' long position.| Cairo Communication vs. Jacquet Metal Service | Cairo Communication vs. Universal Music Group | Cairo Communication vs. Zegona Communications Plc | Cairo Communication vs. Sovereign Metals |
| Boston Properties vs. Arrow Electronics | Boston Properties vs. Impax Environmental Markets | Boston Properties vs. Cairo Communication SpA | Boston Properties vs. Charter Communications Cl |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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