Correlation Between Cairo Communication and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on Cairo Communication and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Hollywood Bowl.
Diversification Opportunities for Cairo Communication and Hollywood Bowl
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cairo and Hollywood is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Cairo Communication i.e., Cairo Communication and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Cairo Communication and Hollywood Bowl
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.1 times more return on investment than Hollywood Bowl. However, Cairo Communication is 1.1 times more volatile than Hollywood Bowl Group. It trades about 0.08 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.01 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. Hollywood Bowl Group
Performance |
| Timeline |
| Cairo Communication SpA |
| Hollywood Bowl Group |
Cairo Communication and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Hollywood Bowl
The main advantage of trading using opposite Cairo Communication and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl'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 |
| Hollywood Bowl vs. Rockfire Resources plc | Hollywood Bowl vs. Tlou Energy | Hollywood Bowl vs. Falcon Oil Gas | Hollywood Bowl vs. Helium One Global |
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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