Correlation Between Cairo Communication and Intermediate Capital

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

Diversification Opportunities for Cairo Communication and Intermediate Capital

0.21

Correlation Coefficient

Cairo Communication  Intermediate Capital

Modest diversification

The 3 months correlation between Cairo and Intermediate is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Communication SpA and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital 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 Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of Cairo Communication i.e., Cairo Communication and Intermediate Capital go up and down completely randomly.

Pair Corralation between Cairo Communication and Intermediate Capital

Assuming the 90 days trading horizon Cairo Communication SpA is expected to under-perform the Intermediate Capital. In addition to that, Cairo Communication is 1.01 times more volatile than Intermediate Capital Group. It trades about -0.01 of its total potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.21 per unit of volatility. If you would invest  175,488  in Intermediate Capital Group on April 23, 2025 and sell it today you would earn a total of  41,512  from holding Intermediate Capital Group or generate 23.66% return on investment over 90 days.

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

Cairo Communication SpA  vs.  Intermediate Capital Group

Cairo Communication SpA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cairo Communication SpA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cairo Communication is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Intermediate Capital

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Capital Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Intermediate Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cairo Communication and Intermediate Capital

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

The idea behind Cairo Communication SpA and Intermediate Capital Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.