Correlation Between Cairo Communication and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Fast Retailing 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 Fast Retailing 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 Fast Retailing Co, you can compare the effects of market volatilities on Cairo Communication and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Fast Retailing.
Diversification Opportunities for Cairo Communication and Fast Retailing
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cairo and Fast is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Cairo Communication i.e., Cairo Communication and Fast Retailing go up and down completely randomly.
Pair Corralation between Cairo Communication and Fast Retailing
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.08 times more return on investment than Fast Retailing. However, Cairo Communication is 1.08 times more volatile than Fast Retailing Co. It trades about 0.07 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.07 per unit of risk. If you would invest 128.00 in Cairo Communication SpA on October 14, 2024 and sell it today you would earn a total of 107.00 from holding Cairo Communication SpA or generate 83.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. Fast Retailing Co
Performance |
| Timeline |
| Cairo Communication SpA |
| Fast Retailing |
Cairo Communication and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Fast Retailing
The main advantage of trading using opposite Cairo Communication and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Cairo Communication vs. Apple Inc | Cairo Communication vs. Apple Inc | Cairo Communication vs. Apple Inc | Cairo Communication vs. Apple Inc |
| Fast Retailing vs. Cairo Communication SpA | Fast Retailing vs. Geely Automobile Holdings | Fast Retailing vs. T MOBILE US | Fast Retailing vs. Canon Marketing Japan |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |