Correlation Between Cairo Communication and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and AMG Advanced 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 AMG Advanced 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 AMG Advanced Metallurgical, you can compare the effects of market volatilities on Cairo Communication and AMG Advanced 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 AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and AMG Advanced.
Diversification Opportunities for Cairo Communication and AMG Advanced
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cairo and AMG is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Cairo Communication i.e., Cairo Communication and AMG Advanced go up and down completely randomly.
Pair Corralation between Cairo Communication and AMG Advanced
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 0.86 times more return on investment than AMG Advanced. However, Cairo Communication SpA is 1.16 times less risky than AMG Advanced. It trades about 0.06 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.12 per unit of risk. If you would invest 227.00 in Cairo Communication SpA on August 24, 2024 and sell it today you would earn a total of 5.00 from holding Cairo Communication SpA or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Cairo Communication SpA |
| AMG Advanced Metallu |
Cairo Communication and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and AMG Advanced
The main advantage of trading using opposite Cairo Communication and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| Cairo Communication vs. Quadrise Plc | Cairo Communication vs. Intuitive Investments Group | Cairo Communication vs. European Metals Holdings | Cairo Communication vs. Athelney Trust plc |
| AMG Advanced vs. Quadrise Plc | AMG Advanced vs. Intuitive Investments Group | AMG Advanced vs. European Metals Holdings | AMG Advanced 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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