Correlation Between Axfood AB and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Axfood 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 Axfood 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 Axfood AB and Catalyst Media Group, you can compare the effects of market volatilities on Axfood 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 Axfood AB with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Catalyst Media.
Diversification Opportunities for Axfood AB and Catalyst Media
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axfood and Catalyst is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB 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 Axfood 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 Axfood AB 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 Axfood AB i.e., Axfood AB and Catalyst Media go up and down completely randomly.
Pair Corralation between Axfood AB and Catalyst Media
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Catalyst Media. In addition to that, Axfood AB is 1.05 times more volatile than Catalyst Media Group. It trades about -0.06 of its total potential returns per unit of risk. Catalyst Media Group is currently generating about 0.09 per unit of volatility. If you would invest 7,750 in Catalyst Media Group on September 3, 2024 and sell it today you would earn a total of 1,250 from holding Catalyst Media Group or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Catalyst Media Group
Performance |
| Timeline |
| Axfood AB |
| Catalyst Media Group |
Axfood AB and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Catalyst Media
The main advantage of trading using opposite Axfood AB and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood 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.| Axfood AB vs. Catalyst Media Group | Axfood AB vs. CATLIN GROUP | Axfood AB vs. Magnora ASA | Axfood AB vs. RTW Venture Fund |
| Catalyst Media vs. Smithson Investment Trust | Catalyst Media vs. Kinnevik Investment AB | Catalyst Media vs. New Residential Investment | Catalyst Media vs. The Mercantile 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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