Correlation Between Catena Media and BH Macro
Can any of the company-specific risk be diversified away by investing in both Catena Media and BH Macro 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 BH Macro 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 BH Macro Limited, you can compare the effects of market volatilities on Catena Media and BH Macro 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 BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and BH Macro.
Diversification Opportunities for Catena Media and BH Macro
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catena and BHMU is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited 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 BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of Catena Media i.e., Catena Media and BH Macro go up and down completely randomly.
Pair Corralation between Catena Media and BH Macro
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the BH Macro. In addition to that, Catena Media is 4.06 times more volatile than BH Macro Limited. It trades about -0.18 of its total potential returns per unit of risk. BH Macro Limited is currently generating about 0.15 per unit of volatility. If you would invest 382.00 in BH Macro Limited on September 13, 2024 and sell it today you would earn a total of 29.00 from holding BH Macro Limited or generate 7.59% 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. BH Macro Limited
Performance |
| Timeline |
| Catena Media PLC |
| BH Macro Limited |
Catena Media and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and BH Macro
The main advantage of trading using opposite Catena Media and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro's long position.| Catena Media vs. Samsung Electronics Co | Catena Media vs. Samsung Electronics Co | Catena Media vs. Hyundai Motor | Catena Media vs. Reliance Industries Ltd |
| BH Macro vs. Iron Mountain | BH Macro vs. Check Point Software | BH Macro vs. Baker Steel Resources | BH Macro vs. Spotify Technology SA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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