Correlation Between Catena Media and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Catena Media and Uniper SE 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 Uniper SE 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 Uniper SE, you can compare the effects of market volatilities on Catena Media and Uniper SE 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 Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Uniper SE.
Diversification Opportunities for Catena Media and Uniper SE
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Catena and Uniper is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE 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 Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Catena Media i.e., Catena Media and Uniper SE go up and down completely randomly.
Pair Corralation between Catena Media and Uniper SE
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Uniper SE. In addition to that, Catena Media is 1.41 times more volatile than Uniper SE. It trades about -0.07 of its total potential returns per unit of risk. Uniper SE is currently generating about -0.06 per unit of volatility. If you would invest 7,885 in Uniper SE on September 3, 2024 and sell it today you would lose (3,574) from holding Uniper SE or give up 45.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media PLC vs. Uniper SE
Performance |
| Timeline |
| Catena Media PLC |
| Uniper SE |
Catena Media and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Uniper SE
The main advantage of trading using opposite Catena Media and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| Catena Media vs. Waste Management | Catena Media vs. XLMedia PLC | Catena Media vs. Liontrust Asset Management | Catena Media vs. Flutter Entertainment PLC |
| Uniper SE vs. Bytes Technology | Uniper SE vs. Livermore Investments Group | Uniper SE vs. FC Investment Trust | Uniper SE vs. Universal Display 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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