Correlation Between AcadeMedia and Catena Media
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Catena 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 AcadeMedia and Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Catena Media PLC, you can compare the effects of market volatilities on AcadeMedia and Catena 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 AcadeMedia with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Catena Media.
Diversification Opportunities for AcadeMedia and Catena Media
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AcadeMedia and Catena is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of AcadeMedia i.e., AcadeMedia and Catena Media go up and down completely randomly.
Pair Corralation between AcadeMedia and Catena Media
Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.29 times more return on investment than Catena Media. However, AcadeMedia AB is 3.41 times less risky than Catena Media. It trades about -0.14 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.14 per unit of risk. If you would invest 6,420 in AcadeMedia AB on August 27, 2024 and sell it today you would lose (215.00) from holding AcadeMedia AB or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Catena Media PLC
Performance |
| Timeline |
| AcadeMedia AB |
| Catena Media PLC |
AcadeMedia and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Catena Media
The main advantage of trading using opposite AcadeMedia and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Catena 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 Catena Media will offset losses from the drop in Catena Media's long position.| AcadeMedia vs. Blackrock World Mining | AcadeMedia vs. Endeavour Mining Corp | AcadeMedia vs. JLEN Environmental Assets | AcadeMedia vs. Tata Steel Limited |
| Catena Media vs. Samsung Electronics Co | Catena Media vs. Samsung Electronics Co | Catena Media vs. Hyundai Motor | Catena Media vs. Toyota Motor Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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