Correlation Between Cairo Communication and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and CATLIN 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 CATLIN 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 CATLIN GROUP , you can compare the effects of market volatilities on Cairo Communication and CATLIN 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 CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and CATLIN GROUP.
Diversification Opportunities for Cairo Communication and CATLIN GROUP
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cairo and CATLIN is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of Cairo Communication i.e., Cairo Communication and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Cairo Communication and CATLIN GROUP
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.25 times more return on investment than CATLIN GROUP. However, Cairo Communication is 1.25 times more volatile than CATLIN GROUP . It trades about 0.07 of its potential returns per unit of risk. CATLIN GROUP is currently generating about 0.03 per unit of risk. If you would invest 134.00 in Cairo Communication SpA on September 3, 2024 and sell it today you would earn a total of 102.00 from holding Cairo Communication SpA or generate 76.12% 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. CATLIN GROUP
Performance |
| Timeline |
| Cairo Communication SpA |
| CATLIN GROUP |
Cairo Communication and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and CATLIN GROUP
The main advantage of trading using opposite Cairo Communication and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, CATLIN 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP'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 |
| CATLIN GROUP vs. Molson Coors Beverage | CATLIN GROUP vs. Flowtech Fluidpower plc | CATLIN GROUP vs. CleanTech Lithium plc | CATLIN GROUP vs. Monster Beverage Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |