Correlation Between Cairo Communication and Catena Media
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Catena Media 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 Catena Media 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 Catena Media PLC, you can compare the effects of market volatilities on Cairo Communication and Catena Media 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 Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Catena Media.
Diversification Opportunities for Cairo Communication and Catena Media
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cairo and Catena is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC 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 Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of Cairo Communication i.e., Cairo Communication and Catena Media go up and down completely randomly.
Pair Corralation between Cairo Communication and Catena Media
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 0.45 times more return on investment than Catena Media. However, Cairo Communication SpA is 2.23 times less risky than Catena Media. It trades about 0.26 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.22 per unit of risk. If you would invest 215.00 in Cairo Communication SpA on September 2, 2024 and sell it today you would earn a total of 21.00 from holding Cairo Communication SpA or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. Catena Media PLC
Performance |
| Timeline |
| Cairo Communication SpA |
| Catena Media PLC |
Cairo Communication and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Catena Media
The main advantage of trading using opposite Cairo Communication and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.| Cairo Communication vs. Uniper SE | Cairo Communication vs. Mulberry Group PLC | Cairo Communication vs. London Security Plc | Cairo Communication vs. Triad Group PLC |
| Catena Media vs. Uniper SE | Catena Media vs. Mulberry Group PLC | Catena Media vs. London Security Plc | Catena Media vs. Triad Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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