Correlation Between Cairo For and Natural Gas
Can any of the company-specific risk be diversified away by investing in both Cairo For and Natural Gas 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 For and Natural Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairo For Investment and Natural Gas Mining, you can compare the effects of market volatilities on Cairo For and Natural Gas 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 For with a short position of Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo For and Natural Gas.
Diversification Opportunities for Cairo For and Natural Gas
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cairo and Natural is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cairo For Investment and Natural Gas Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Mining and Cairo For 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 For Investment are associated (or correlated) with Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Mining has no effect on the direction of Cairo For i.e., Cairo For and Natural Gas go up and down completely randomly.
Pair Corralation between Cairo For and Natural Gas
Assuming the 90 days trading horizon Cairo For Investment is expected to generate 1.11 times more return on investment than Natural Gas. However, Cairo For is 1.11 times more volatile than Natural Gas Mining. It trades about 0.16 of its potential returns per unit of risk. Natural Gas Mining is currently generating about -0.62 per unit of risk. If you would invest 1,412 in Cairo For Investment on September 24, 2024 and sell it today you would earn a total of 38.00 from holding Cairo For Investment or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo For Investment vs. Natural Gas Mining
Performance |
| Timeline |
| Cairo For Investment |
| Natural Gas Mining |
Cairo For and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo For and Natural Gas
The main advantage of trading using opposite Cairo For and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo For position performs unexpectedly, Natural Gas 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 Natural Gas will offset losses from the drop in Natural Gas' long position.| Cairo For vs. Memphis Pharmaceuticals | Cairo For vs. Paint Chemicals Industries | Cairo For vs. Egyptians For Investment | Cairo For vs. Global Telecom Holding |
| Natural Gas vs. Egyptian Transport | Natural Gas vs. Al Tawfeek Leasing | Natural Gas vs. Odin for Investment | Natural Gas vs. Cairo For Investment |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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