Correlation Between Cairo Oils and Copper For

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

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

Diversification Opportunities for Cairo Oils and Copper For

-0.26

Correlation Coefficient

Cairo Oils  Copper For

Very good diversification

The 3 months correlation between Cairo and Copper is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cairo Oils Soap and Copper For Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper For Commercial and Cairo Oils 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 Oils Soap are associated (or correlated) with Copper For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper For Commercial has no effect on the direction of Cairo Oils i.e., Cairo Oils and Copper For go up and down completely randomly.

Pair Corralation between Cairo Oils and Copper For

Assuming the 90 days trading horizon Cairo Oils is expected to generate 1.17 times less return on investment than Copper For. But when comparing it to its historical volatility, Cairo Oils Soap is 1.91 times less risky than Copper For. It trades about 0.03 of its potential returns per unit of risk. Copper For Commercial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,615  in Copper For Commercial on March 7, 2025 and sell it today you would lose (1,550) from holding Copper For Commercial or give up 95.98% of portfolio value over 90 days.

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

Cairo Oils Soap  vs.  Copper For Commercial

Cairo Oils Soap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cairo Oils Soap 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 July 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Copper For Commercial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Copper For Commercial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Copper For reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cairo Oils and Copper For

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

The idea behind Cairo Oils Soap and Copper For Commercial 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.