Correlation Between Cairo Communication and RBG Holdings
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and RBG Holdings 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 RBG Holdings 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 RBG Holdings PLC, you can compare the effects of market volatilities on Cairo Communication and RBG Holdings 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 RBG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and RBG Holdings.
Diversification Opportunities for Cairo Communication and RBG Holdings
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cairo and RBG is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and RBG Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBG Holdings PLC 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 RBG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBG Holdings PLC has no effect on the direction of Cairo Communication i.e., Cairo Communication and RBG Holdings go up and down completely randomly.
Pair Corralation between Cairo Communication and RBG Holdings
Assuming the 90 days trading horizon Cairo Communication is expected to generate 3.91 times less return on investment than RBG Holdings. But when comparing it to its historical volatility, Cairo Communication SpA is 5.03 times less risky than RBG Holdings. It trades about 0.45 of its potential returns per unit of risk. RBG Holdings PLC is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 163.00 in RBG Holdings PLC on September 13, 2024 and sell it today you would earn a total of 132.00 from holding RBG Holdings PLC or generate 80.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cairo Communication SpA vs. RBG Holdings PLC
Performance |
| Timeline |
| Cairo Communication SpA |
| RBG Holdings PLC |
Cairo Communication and RBG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and RBG Holdings
The main advantage of trading using opposite Cairo Communication and RBG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, RBG Holdings 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 RBG Holdings will offset losses from the drop in RBG Holdings' 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 |
| RBG Holdings vs. Gaztransport et Technigaz | RBG Holdings vs. Zinc Media Group | RBG Holdings vs. TechnipFMC PLC | RBG Holdings vs. Intermediate Capital Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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