Correlation Between KOBE STEEL and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both KOBE STEEL 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 KOBE STEEL and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOBE STEEL LTD and Cairo Communication SpA, you can compare the effects of market volatilities on KOBE STEEL 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 KOBE STEEL with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOBE STEEL and Cairo Communication.
Diversification Opportunities for KOBE STEEL and Cairo Communication
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KOBE and Cairo is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding KOBE STEEL LTD 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 KOBE STEEL 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 KOBE STEEL LTD 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 KOBE STEEL i.e., KOBE STEEL and Cairo Communication go up and down completely randomly.
Pair Corralation between KOBE STEEL and Cairo Communication
Assuming the 90 days trading horizon KOBE STEEL is expected to generate 10.21 times less return on investment than Cairo Communication. But when comparing it to its historical volatility, KOBE STEEL LTD is 2.11 times less risky than Cairo Communication. It trades about 0.01 of its potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 250.00 in Cairo Communication SpA on September 4, 2025 and sell it today you would earn a total of 7.00 from holding Cairo Communication SpA or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOBE STEEL LTD vs. Cairo Communication SpA
Performance |
| Timeline |
| KOBE STEEL LTD |
| Cairo Communication SpA |
KOBE STEEL and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOBE STEEL and Cairo Communication
The main advantage of trading using opposite KOBE STEEL and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOBE STEEL 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 KOBE STEEL LTD 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.| Cairo Communication vs. Apple Inc | Cairo Communication vs. Apple Inc | Cairo Communication vs. Apple Inc | Cairo Communication vs. Apple Inc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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