Correlation Between Baillie Gifford and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Cairo Communication 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 Baillie Gifford and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford European and Cairo Communication SpA, you can compare the effects of market volatilities on Baillie Gifford and Cairo Communication 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 Baillie Gifford with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Cairo Communication.
Diversification Opportunities for Baillie Gifford and Cairo Communication
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baillie and Cairo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford European and Cairo Communication SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Communication SpA and Baillie Gifford 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 Baillie Gifford European are associated (or correlated) with Cairo Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Communication SpA has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Cairo Communication go up and down completely randomly.
Pair Corralation between Baillie Gifford and Cairo Communication
Assuming the 90 days trading horizon Baillie Gifford is expected to generate 9.77 times less return on investment than Cairo Communication. But when comparing it to its historical volatility, Baillie Gifford European is 2.23 times less risky than Cairo Communication. It trades about 0.03 of its potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 235.00 in Cairo Communication SpA on September 22, 2024 and sell it today you would earn a total of 12.00 from holding Cairo Communication SpA or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford European vs. Cairo Communication SpA
Performance |
| Timeline |
| Baillie Gifford European |
| Cairo Communication SpA |
Baillie Gifford and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Cairo Communication
The main advantage of trading using opposite Baillie Gifford and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Cairo Communication 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 Cairo Communication will offset losses from the drop in Cairo Communication's long position.| Baillie Gifford vs. McEwen Mining | Baillie Gifford vs. Panther Metals PLC | Baillie Gifford vs. Ebro Foods | Baillie Gifford vs. Sligro Food Group |
| Cairo Communication vs. Samsung Electronics Co | Cairo Communication vs. Samsung Electronics Co | Cairo Communication vs. Hyundai Motor | Cairo Communication vs. Reliance Industries Ltd |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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