Correlation Between Gadwa For and Cairo For

Can any of the company-specific risk be diversified away by investing in both Gadwa For and Cairo For 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 Gadwa For and Cairo For into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gadwa For Industrial and Cairo For Investment, you can compare the effects of market volatilities on Gadwa For and Cairo For 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 Gadwa For with a short position of Cairo For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gadwa For and Cairo For.

Diversification Opportunities for Gadwa For and Cairo For

-0.52

Correlation Coefficient

Gadwa For  Cairo For

Excellent diversification

The 3 months correlation between Gadwa and Cairo is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gadwa For Industrial and Cairo For Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo For Investment and Gadwa For 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 Gadwa For Industrial are associated (or correlated) with Cairo For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo For Investment has no effect on the direction of Gadwa For i.e., Gadwa For and Cairo For go up and down completely randomly.

Pair Corralation between Gadwa For and Cairo For

Assuming the 90 days trading horizon Gadwa For Industrial is expected to under-perform the Cairo For. In addition to that, Gadwa For is 1.25 times more volatile than Cairo For Investment. It trades about -0.15 of its total potential returns per unit of risk. Cairo For Investment is currently generating about 0.07 per unit of volatility. If you would invest  1,375  in Cairo For Investment on September 13, 2024 and sell it today you would earn a total of  74.00  from holding Cairo For Investment or generate 5.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Gadwa For Industrial  vs.  Cairo For Investment

Gadwa For Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gadwa For Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Cairo For Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cairo For Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Cairo For may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gadwa For and Cairo For

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

The idea behind Gadwa For Industrial and Cairo For Investment 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.