Correlation Between Cairo Communication and Autins Group
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Autins Group 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 Autins Group 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 Autins Group plc, you can compare the effects of market volatilities on Cairo Communication and Autins Group 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 Autins Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Autins Group.
Diversification Opportunities for Cairo Communication and Autins Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cairo and Autins is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Autins Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autins Group 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 Autins Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autins Group plc has no effect on the direction of Cairo Communication i.e., Cairo Communication and Autins Group go up and down completely randomly.
Pair Corralation between Cairo Communication and Autins Group
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 0.38 times more return on investment than Autins Group. However, Cairo Communication SpA is 2.61 times less risky than Autins Group. It trades about 0.42 of its potential returns per unit of risk. Autins Group plc is currently generating about -0.28 per unit of risk. If you would invest 214.00 in Cairo Communication SpA on September 13, 2024 and sell it today you would earn a total of 37.00 from holding Cairo Communication SpA or generate 17.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. Autins Group plc
Performance |
| Timeline |
| Cairo Communication SpA |
| Autins Group plc |
Cairo Communication and Autins Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Autins Group
The main advantage of trading using opposite Cairo Communication and Autins Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Autins Group 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 Autins Group will offset losses from the drop in Autins Group's long position.| Cairo Communication vs. Samsung Electronics Co | Cairo Communication vs. Samsung Electronics Co | Cairo Communication vs. Hyundai Motor | Cairo Communication vs. Reliance Industries Ltd |
| Autins Group vs. Fidelity National Information | Autins Group vs. Capital Drilling | Autins Group vs. Gaztransport et Technigaz | Autins Group vs. STMicroelectronics NV |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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