Correlation Between Cairo Communication and Blackstone Loan
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Blackstone Loan 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 Blackstone Loan 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 Blackstone Loan Financing, you can compare the effects of market volatilities on Cairo Communication and Blackstone Loan 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 Blackstone Loan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Blackstone Loan.
Diversification Opportunities for Cairo Communication and Blackstone Loan
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cairo and Blackstone is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Blackstone Loan Financing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Loan Financing 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 Blackstone Loan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Loan Financing has no effect on the direction of Cairo Communication i.e., Cairo Communication and Blackstone Loan go up and down completely randomly.
Pair Corralation between Cairo Communication and Blackstone Loan
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.27 times more return on investment than Blackstone Loan. However, Cairo Communication is 1.27 times more volatile than Blackstone Loan Financing. It trades about 0.53 of its potential returns per unit of risk. Blackstone Loan Financing is currently generating about 0.17 per unit of risk. If you would invest 210.00 in Cairo Communication SpA on September 14, 2024 and sell it today you would earn a total of 45.00 from holding Cairo Communication SpA or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. Blackstone Loan Financing
Performance |
| Timeline |
| Cairo Communication SpA |
| Blackstone Loan Financing |
Cairo Communication and Blackstone Loan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Blackstone Loan
The main advantage of trading using opposite Cairo Communication and Blackstone Loan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Blackstone Loan 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 Blackstone Loan will offset losses from the drop in Blackstone Loan's long position.| Cairo Communication vs. Herald Investment Trust | Cairo Communication vs. The Mercantile Investment | Cairo Communication vs. Beeks Trading | Cairo Communication vs. Oakley Capital Investments |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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