Correlation Between Cairo Communication and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Cairo Communication and PPHE Hotel 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 Communication and PPHE Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairo Communication SpA and PPHE Hotel Group, you can compare the effects of market volatilities on Cairo Communication and PPHE Hotel 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 Communication with a short position of PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and PPHE Hotel.
Diversification Opportunities for Cairo Communication and PPHE Hotel
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cairo and PPHE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group and Cairo Communication 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 Communication SpA are associated (or correlated) with PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of Cairo Communication i.e., Cairo Communication and PPHE Hotel go up and down completely randomly.
Pair Corralation between Cairo Communication and PPHE Hotel
Assuming the 90 days trading horizon Cairo Communication SpA is expected to generate 0.85 times more return on investment than PPHE Hotel. However, Cairo Communication SpA is 1.18 times less risky than PPHE Hotel. It trades about 0.21 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about -0.16 per unit of risk. If you would invest 242.00 in Cairo Communication SpA on December 29, 2024 and sell it today you would earn a total of 44.00 from holding Cairo Communication SpA or generate 18.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cairo Communication SpA vs. PPHE Hotel Group
Performance |
Timeline |
Cairo Communication SpA |
PPHE Hotel Group |
Cairo Communication and PPHE Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cairo Communication and PPHE Hotel
The main advantage of trading using opposite Cairo Communication and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.Cairo Communication vs. Spirent Communications plc | Cairo Communication vs. Made Tech Group | Cairo Communication vs. Pressure Technologies Plc | Cairo Communication vs. Dalata Hotel Group |
PPHE Hotel vs. Cairo Communication SpA | PPHE Hotel vs. United Internet AG | PPHE Hotel vs. Tata Steel Limited | PPHE Hotel vs. Aeorema Communications 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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