Correlation Between Cairo For and General Silos
Can any of the company-specific risk be diversified away by investing in both Cairo For and General Silos 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 General Silos 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 General Silos Storage, you can compare the effects of market volatilities on Cairo For and General Silos 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 General Silos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo For and General Silos.
Diversification Opportunities for Cairo For and General Silos
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cairo and General is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cairo For Investment and General Silos Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Silos Storage 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 General Silos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Silos Storage has no effect on the direction of Cairo For i.e., Cairo For and General Silos go up and down completely randomly.
Pair Corralation between Cairo For and General Silos
Assuming the 90 days trading horizon Cairo For is expected to generate 2.02 times less return on investment than General Silos. But when comparing it to its historical volatility, Cairo For Investment is 2.83 times less risky than General Silos. It trades about 0.07 of its potential returns per unit of risk. General Silos Storage is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12,901 in General Silos Storage on September 3, 2024 and sell it today you would earn a total of 7,146 from holding General Silos Storage or generate 55.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 73.32% |
| Values | Daily Returns |
Cairo For Investment vs. General Silos Storage
Performance |
| Timeline |
| Cairo For Investment |
| General Silos Storage |
Cairo For and General Silos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo For and General Silos
The main advantage of trading using opposite Cairo For and General Silos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo For position performs unexpectedly, General Silos 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 General Silos will offset losses from the drop in General Silos' long position.| Cairo For vs. Paint Chemicals Industries | Cairo For vs. Reacap Financial Investments | Cairo For vs. Egyptians For Investment | Cairo For vs. Misr Oils Soap |
| General Silos vs. Paint Chemicals Industries | General Silos vs. Reacap Financial Investments | General Silos vs. Egyptians For Investment | General Silos vs. Misr Oils Soap |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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