Correlation Between Cairo Communication and Millennium Copthorne

Can any of the company-specific risk be diversified away by investing in both Cairo Communication and Millennium Copthorne 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 Millennium Copthorne 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 Millennium Copthorne Hotels, you can compare the effects of market volatilities on Cairo Communication and Millennium Copthorne 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 Millennium Copthorne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo Communication and Millennium Copthorne.

Diversification Opportunities for Cairo Communication and Millennium Copthorne

0.0

Correlation Coefficient

Cairo Communication  Millennium Copthorne

Pay attention - limited upside

The 3 months correlation between Cairo and Millennium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Millennium Copthorne Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Copthorne 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 Millennium Copthorne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Copthorne has no effect on the direction of Cairo Communication i.e., Cairo Communication and Millennium Copthorne go up and down completely randomly.

Pair Corralation between Cairo Communication and Millennium Copthorne

If you would invest  131.00  in Cairo Communication SpA on September 24, 2024 and sell it today you would earn a total of  116.00  from holding Cairo Communication SpA or generate 88.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cairo Communication SpA  vs.  Millennium Copthorne Hotels

Cairo Communication SpA

Risk-Adjusted Performance

11 of 100

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 uncertain basic indicators, Cairo Communication unveiled solid returns over the last few months and may actually be approaching a breakup point.

Millennium Copthorne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Millennium Copthorne Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Millennium Copthorne is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cairo Communication and Millennium Copthorne

The main advantage of trading using opposite Cairo Communication and Millennium Copthorne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo Communication position performs unexpectedly, Millennium Copthorne 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 Millennium Copthorne will offset losses from the drop in Millennium Copthorne's long position.

The idea behind Cairo Communication SpA and Millennium Copthorne Hotels 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.