Correlation Between Cairo Communication and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on Cairo Communication and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Gaztransport.
Diversification Opportunities for Cairo Communication and Gaztransport
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cairo and Gaztransport is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Cairo Communication i.e., Cairo Communication and Gaztransport go up and down completely randomly.
Pair Corralation between Cairo Communication and Gaztransport
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.09 times more return on investment than Gaztransport. However, Cairo Communication is 1.09 times more volatile than Gaztransport et Technigaz. It trades about 0.07 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.05 per unit of risk. If you would invest 131.00 in Cairo Communication SpA on August 30, 2024 and sell it today you would earn a total of 101.00 from holding Cairo Communication SpA or generate 77.1% 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. Gaztransport et Technigaz
Performance |
| Timeline |
| Cairo Communication SpA |
| Gaztransport et Technigaz |
Cairo Communication and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Gaztransport
The main advantage of trading using opposite Cairo Communication and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| Cairo Communication vs. Catalyst Media Group | Cairo Communication vs. National Beverage Corp | Cairo Communication vs. Bankers Investment Trust | Cairo Communication vs. Scandinavian Tobacco Group |
| Gaztransport vs. Lendinvest PLC | Gaztransport vs. Neometals | Gaztransport vs. Albion Technology General | Gaztransport vs. Jupiter Fund Management |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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