Correlation Between Highlight Communications and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Cairo Communication SpA, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Cairo Communication.
Diversification Opportunities for Highlight Communications and Cairo Communication
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Highlight and Cairo is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG 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 Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and Cairo Communication go up and down completely randomly.
Pair Corralation between Highlight Communications and Cairo Communication
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the Cairo Communication. In addition to that, Highlight Communications is 1.51 times more volatile than Cairo Communication SpA. It trades about -0.05 of its total potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.06 per unit of volatility. If you would invest 147.00 in Cairo Communication SpA on October 30, 2024 and sell it today you would earn a total of 99.00 from holding Cairo Communication SpA or generate 67.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. Cairo Communication SpA
Performance |
| Timeline |
| Highlight Communications |
| Cairo Communication SpA |
Highlight Communications and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Cairo Communication
The main advantage of trading using opposite Highlight Communications and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. Keck Seng Investments | Highlight Communications vs. Gladstone Investment | Highlight Communications vs. CENTURIA OFFICE REIT | Highlight Communications vs. NURAN WIRELESS INC |
| Cairo Communication vs. Heidelberg Materials AG | Cairo Communication vs. Rayonier Advanced Materials | Cairo Communication vs. MidCap Financial Investment | Cairo Communication vs. Plastic Omnium |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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