Correlation Between Lendlease and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Lendlease 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 Lendlease and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Cairo Communication SpA, you can compare the effects of market volatilities on Lendlease 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 Lendlease with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Cairo Communication.
Diversification Opportunities for Lendlease and Cairo Communication
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendlease and Cairo is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group 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 Lendlease 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 Lendlease Group 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 Lendlease i.e., Lendlease and Cairo Communication go up and down completely randomly.
Pair Corralation between Lendlease and Cairo Communication
Assuming the 90 days trading horizon Lendlease is expected to generate 1.54 times less return on investment than Cairo Communication. In addition to that, Lendlease is 1.18 times more volatile than Cairo Communication SpA. It trades about 0.12 of its total potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.22 per unit of volatility. If you would invest 231.00 in Cairo Communication SpA on November 3, 2024 and sell it today you would earn a total of 15.00 from holding Cairo Communication SpA or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. Cairo Communication SpA
Performance |
| Timeline |
| Lendlease Group |
| Cairo Communication SpA |
Lendlease and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Cairo Communication
The main advantage of trading using opposite Lendlease and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease 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.| Lendlease vs. Monster Beverage Corp | Lendlease vs. Tsingtao Brewery | Lendlease vs. National Beverage Corp | Lendlease vs. EVS Broadcast Equipment |
| Cairo Communication vs. SIVERS SEMICONDUCTORS AB | Cairo Communication vs. NorAm Drilling AS | Cairo Communication vs. Volkswagen AG | Cairo Communication vs. Darden Restaurants |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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