Correlation Between Volvo AB and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Volvo AB and Catalyst Media 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 Volvo AB and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volvo AB Series and Catalyst Media Group, you can compare the effects of market volatilities on Volvo AB and Catalyst Media 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 Volvo AB with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volvo AB and Catalyst Media.
Diversification Opportunities for Volvo AB and Catalyst Media
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Volvo and Catalyst is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Volvo AB Series and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group and Volvo AB 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 Volvo AB Series are associated (or correlated) with Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Volvo AB i.e., Volvo AB and Catalyst Media go up and down completely randomly.
Pair Corralation between Volvo AB and Catalyst Media
Assuming the 90 days trading horizon Volvo AB Series is expected to generate 0.63 times more return on investment than Catalyst Media. However, Volvo AB Series is 1.6 times less risky than Catalyst Media. It trades about 0.0 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.41 per unit of risk. If you would invest 28,554 in Volvo AB Series on September 12, 2024 and sell it today you would lose (24.00) from holding Volvo AB Series or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Volvo AB Series vs. Catalyst Media Group
Performance |
| Timeline |
| Volvo AB Series |
| Catalyst Media Group |
Volvo AB and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volvo AB and Catalyst Media
The main advantage of trading using opposite Volvo AB and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volvo AB position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| Volvo AB vs. Roadside Real Estate | Volvo AB vs. Take Two Interactive Software | Volvo AB vs. Lindsell Train Investment | Volvo AB vs. Associated British Foods |
| Catalyst Media vs. Charter Communications Cl | Catalyst Media vs. Cairo Communication SpA | Catalyst Media vs. Gamma Communications PLC | Catalyst Media vs. Lowland Investment Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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