Correlation Between Catena Media and Erste Group
Can any of the company-specific risk be diversified away by investing in both Catena Media and Erste Group 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 Catena Media and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena Media PLC and Erste Group Bank, you can compare the effects of market volatilities on Catena Media and Erste Group 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 Catena Media with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Erste Group.
Diversification Opportunities for Catena Media and Erste Group
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catena and Erste is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank and Catena Media 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 Catena Media PLC are associated (or correlated) with Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Catena Media i.e., Catena Media and Erste Group go up and down completely randomly.
Pair Corralation between Catena Media and Erste Group
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Erste Group. In addition to that, Catena Media is 4.24 times more volatile than Erste Group Bank. It trades about -0.05 of its total potential returns per unit of risk. Erste Group Bank is currently generating about 0.15 per unit of volatility. If you would invest 5,297 in Erste Group Bank on November 6, 2024 and sell it today you would earn a total of 585.00 from holding Erste Group Bank or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media PLC vs. Erste Group Bank
Performance |
| Timeline |
| Catena Media PLC |
| Erste Group Bank |
Catena Media and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Erste Group
The main advantage of trading using opposite Catena Media and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| Catena Media vs. JB Hunt Transport | Catena Media vs. Cars Inc | Catena Media vs. Tatton Asset Management | Catena Media vs. Check Point Software |
| Erste Group vs. Geely Automobile Holdings | Erste Group vs. Supermarket Income REIT | Erste Group vs. Pressure Technologies Plc | Erste Group vs. TechnipFMC PLC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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