Correlation Between Cairo Communication and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Intermediate Capital 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 Intermediate Capital 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 Intermediate Capital Group, you can compare the effects of market volatilities on Cairo Communication and Intermediate Capital 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 Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Intermediate Capital.
Diversification Opportunities for Cairo Communication and Intermediate Capital
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cairo and Intermediate is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital 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 Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of Cairo Communication i.e., Cairo Communication and Intermediate Capital go up and down completely randomly.
Pair Corralation between Cairo Communication and Intermediate Capital
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.13 times more return on investment than Intermediate Capital. However, Cairo Communication is 1.13 times more volatile than Intermediate Capital Group. It trades about 0.22 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about -0.07 per unit of risk. If you would invest 229.00 in Cairo Communication SpA on September 24, 2024 and sell it today you would earn a total of 18.00 from holding Cairo Communication SpA or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. Intermediate Capital Group
Performance |
| Timeline |
| Cairo Communication SpA |
| Intermediate Capital |
Cairo Communication and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Intermediate Capital
The main advantage of trading using opposite Cairo Communication and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Intermediate Capital 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 Intermediate Capital will offset losses from the drop in Intermediate Capital's long position.| Cairo Communication vs. Monster Beverage Corp | Cairo Communication vs. BW Offshore | Cairo Communication vs. Planet Fitness Cl | Cairo Communication vs. HCA Healthcare |
| Intermediate Capital vs. Cairo Communication SpA | Intermediate Capital vs. International Consolidated Airlines | Intermediate Capital vs. Delta Air Lines | Intermediate Capital vs. Verizon Communications |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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