Correlation Between Clean Power and Cairo Communication

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Clean Power 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 Clean Power and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Power Hydrogen and Cairo Communication SpA, you can compare the effects of market volatilities on Clean Power 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 Clean Power with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Power and Cairo Communication.

Diversification Opportunities for Clean Power and Cairo Communication

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Clean and Cairo is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Clean Power Hydrogen 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 Clean Power 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 Clean Power Hydrogen 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 Clean Power i.e., Clean Power and Cairo Communication go up and down completely randomly.

Pair Corralation between Clean Power and Cairo Communication

Assuming the 90 days trading horizon Clean Power Hydrogen is expected to under-perform the Cairo Communication. But the stock apears to be less risky and, when comparing its historical volatility, Clean Power Hydrogen is 1.4 times less risky than Cairo Communication. The stock trades about -0.37 of its potential returns per unit of risk. The Cairo Communication SpA is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Cairo Communication SpA on October 8, 2024 and sell it today you would lose (6.00) from holding Cairo Communication SpA or give up 2.4% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Clean Power Hydrogen  vs.  Cairo Communication SpA

 Performance 
       Timeline  
Clean Power Hydrogen 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Clean Power Hydrogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Cairo Communication SpA 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Cairo Communication SpA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Cairo Communication unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clean Power and Cairo Communication Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clean Power and Cairo Communication

The main advantage of trading using opposite Clean Power and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Power 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.
The idea behind Clean Power Hydrogen and Cairo Communication SpA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios