Correlation Between Cairo Communication and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Cairo Communication and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Samsung Electronics.
Diversification Opportunities for Cairo Communication and Samsung Electronics
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cairo and Samsung is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Cairo Communication i.e., Cairo Communication and Samsung Electronics go up and down completely randomly.
Pair Corralation between Cairo Communication and Samsung Electronics
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.0 times more return on investment than Samsung Electronics. However, Cairo Communication SpA is 1.0 times less risky than Samsung Electronics. It trades about 0.06 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 154.00 in Cairo Communication SpA on November 6, 2024 and sell it today you would earn a total of 99.00 from holding Cairo Communication SpA or generate 64.29% 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. Samsung Electronics Co
Performance |
| Timeline |
| Cairo Communication SpA |
| Samsung Electronics |
Cairo Communication and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Samsung Electronics
The main advantage of trading using opposite Cairo Communication and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Cairo Communication vs. Host Hotels Resorts | Cairo Communication vs. Fonix Mobile plc | Cairo Communication vs. Universal Display Corp | Cairo Communication vs. Geely Automobile Holdings |
| Samsung Electronics vs. Optima Health plc | Samsung Electronics vs. Abingdon Health Plc | Samsung Electronics vs. CVS Health Corp | Samsung Electronics vs. Automatic Data Processing |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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