Correlation Between Cairo Communication and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Games Workshop 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 Games Workshop 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 Games Workshop Group, you can compare the effects of market volatilities on Cairo Communication and Games Workshop 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 Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Games Workshop.
Diversification Opportunities for Cairo Communication and Games Workshop
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cairo and Games is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop 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 Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of Cairo Communication i.e., Cairo Communication and Games Workshop go up and down completely randomly.
Pair Corralation between Cairo Communication and Games Workshop
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.85 times more return on investment than Games Workshop. However, Cairo Communication is 1.85 times more volatile than Games Workshop Group. It trades about 0.33 of its potential returns per unit of risk. Games Workshop Group is currently generating about -0.08 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. Games Workshop Group
Performance |
| Timeline |
| Cairo Communication SpA |
| Games Workshop Group |
Cairo Communication and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Games Workshop
The main advantage of trading using opposite Cairo Communication and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Games Workshop 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 Games Workshop will offset losses from the drop in Games Workshop'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 |
| Games Workshop vs. Livermore Investments Group | Games Workshop vs. Kinnevik Investment AB | Games Workshop vs. Jade Road Investments | Games Workshop vs. Aurora Investment Trust |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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