Correlation Between Monks Investment and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Monks Investment 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 Monks Investment and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monks Investment Trust and Cairo Communication SpA, you can compare the effects of market volatilities on Monks Investment 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 Monks Investment with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and Cairo Communication.
Diversification Opportunities for Monks Investment and Cairo Communication
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monks and Cairo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust 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 Monks Investment 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 Monks Investment Trust 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 Monks Investment i.e., Monks Investment and Cairo Communication go up and down completely randomly.
Pair Corralation between Monks Investment and Cairo Communication
Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.54 times more return on investment than Cairo Communication. However, Monks Investment Trust is 1.86 times less risky than Cairo Communication. It trades about 0.28 of its potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.06 per unit of risk. If you would invest 119,000 in Monks Investment Trust on August 30, 2024 and sell it today you would earn a total of 7,400 from holding Monks Investment Trust or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monks Investment Trust vs. Cairo Communication SpA
Performance |
| Timeline |
| Monks Investment Trust |
| Cairo Communication SpA |
Monks Investment and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and Cairo Communication
The main advantage of trading using opposite Monks Investment and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment 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.| Monks Investment vs. EVS Broadcast Equipment | Monks Investment vs. St Galler Kantonalbank | Monks Investment vs. Ashtead Technology Holdings | Monks Investment vs. CleanTech Lithium plc |
| Cairo Communication vs. Tungsten West PLC | Cairo Communication vs. Argo Group Limited | Cairo Communication vs. Hardide PLC | Cairo Communication vs. Versarien PLC |
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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