Correlation Between Cairo Communication and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and BW Offshore 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 BW Offshore 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 BW Offshore, you can compare the effects of market volatilities on Cairo Communication and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and BW Offshore.
Diversification Opportunities for Cairo Communication and BW Offshore
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cairo and 0RKH is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of Cairo Communication i.e., Cairo Communication and BW Offshore go up and down completely randomly.
Pair Corralation between Cairo Communication and BW Offshore
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 0.68 times more return on investment than BW Offshore. However, Cairo Communication SpA is 1.47 times less risky than BW Offshore. It trades about 0.08 of its potential returns per unit of risk. BW Offshore is currently generating about 0.0 per unit of risk. If you would invest 206.00 in Cairo Communication SpA on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Cairo Communication SpA or generate 14.56% 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. BW Offshore
Performance |
| Timeline |
| Cairo Communication SpA |
| BW Offshore |
Cairo Communication and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and BW Offshore
The main advantage of trading using opposite Cairo Communication and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| Cairo Communication vs. Catalyst Media Group | Cairo Communication vs. CATLIN GROUP | Cairo Communication vs. RTW Venture Fund | Cairo Communication vs. Secure Property Development |
| BW Offshore vs. Catalyst Media Group | BW Offshore vs. CATLIN GROUP | BW Offshore vs. RTW Venture Fund | BW Offshore vs. Secure Property Development |
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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