Correlation Between Cairo Communication and GoldMining
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and GoldMining 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 GoldMining 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 GoldMining, you can compare the effects of market volatilities on Cairo Communication and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and GoldMining.
Diversification Opportunities for Cairo Communication and GoldMining
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cairo and GoldMining is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Cairo Communication i.e., Cairo Communication and GoldMining go up and down completely randomly.
Pair Corralation between Cairo Communication and GoldMining
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 0.76 times more return on investment than GoldMining. However, Cairo Communication SpA is 1.31 times less risky than GoldMining. It trades about 0.33 of its potential returns per unit of risk. GoldMining is currently generating about -0.02 per unit of risk. If you would invest 253.00 in Cairo Communication SpA on November 28, 2024 and sell it today you would earn a total of 32.00 from holding Cairo Communication SpA or generate 12.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 63.64% |
| Values | Daily Returns |
Cairo Communication SpA vs. GoldMining
Performance |
| Timeline |
| Cairo Communication SpA |
| GoldMining |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Cairo Communication and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and GoldMining
The main advantage of trading using opposite Cairo Communication and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Cairo Communication vs. GreenX Metals | Cairo Communication vs. Scandic Hotels Group | Cairo Communication vs. CNH Industrial NV | Cairo Communication vs. METALL ZUG AG |
| GoldMining vs. Liontrust Asset Management | GoldMining vs. Livermore Investments Group | GoldMining vs. BlackRock Frontiers Investment | GoldMining vs. Ruffer Investment |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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