Correlation Between Cairo Communication and Newmont
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Newmont 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 Newmont 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 Newmont, you can compare the effects of market volatilities on Cairo Communication and Newmont 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 Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Newmont.
Diversification Opportunities for Cairo Communication and Newmont
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cairo and Newmont is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont 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 Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of Cairo Communication i.e., Cairo Communication and Newmont go up and down completely randomly.
Pair Corralation between Cairo Communication and Newmont
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 1.31 times more return on investment than Newmont. However, Cairo Communication is 1.31 times more volatile than Newmont. It trades about -0.01 of its potential returns per unit of risk. Newmont is currently generating about -0.14 per unit of risk. If you would invest 240.00 in Cairo Communication SpA on October 10, 2024 and sell it today you would lose (3.00) from holding Cairo Communication SpA or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo Communication SpA vs. Newmont
Performance |
| Timeline |
| Cairo Communication SpA |
| Newmont |
Cairo Communication and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo Communication and Newmont
The main advantage of trading using opposite Cairo Communication and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Newmont 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 Newmont will offset losses from the drop in Newmont's long position.| Cairo Communication vs. International Consolidated Airlines | Cairo Communication vs. Aegean Airlines SA | Cairo Communication vs. Ares Management Corp | Cairo Communication vs. Coor Service Management |
| Newmont vs. SANOK RUBBER ZY | Newmont vs. SALESFORCE INC CDR | Newmont vs. Applied Materials | Newmont vs. Materialise NV |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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