Correlation Between Centaur Media and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Centaur Media 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 Centaur Media and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaur Media and Cairo Communication SpA, you can compare the effects of market volatilities on Centaur Media 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 Centaur Media with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Media and Cairo Communication.
Diversification Opportunities for Centaur Media and Cairo Communication
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centaur and Cairo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Media 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 Centaur Media 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 Centaur Media 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 Centaur Media i.e., Centaur Media and Cairo Communication go up and down completely randomly.
Pair Corralation between Centaur Media and Cairo Communication
Assuming the 90 days trading horizon Centaur Media is expected to under-perform the Cairo Communication. In addition to that, Centaur Media is 1.71 times more volatile than Cairo Communication SpA. It trades about -0.15 of its total potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.08 per unit of volatility. If you would invest 206.00 in Cairo Communication SpA on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Cairo Communication SpA or generate 14.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaur Media vs. Cairo Communication SpA
Performance |
| Timeline |
| Centaur Media |
| Cairo Communication SpA |
Centaur Media and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaur Media and Cairo Communication
The main advantage of trading using opposite Centaur Media and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Media 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.| Centaur Media vs. X FAB Silicon Foundries | Centaur Media vs. Gear4music Plc | Centaur Media vs. SilverCrest Metals | Centaur Media vs. CNH Industrial NV |
| Cairo Communication vs. Catalyst Media Group | Cairo Communication vs. CATLIN GROUP | Cairo Communication vs. RTW Venture Fund | Cairo Communication vs. Secure Property Development |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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