Correlation Between Catena Media and Burford Capital
Can any of the company-specific risk be diversified away by investing in both Catena Media and Burford Capital 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 Burford Capital 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 Burford Capital Limited, you can compare the effects of market volatilities on Catena Media and Burford Capital 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 Burford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Burford Capital.
Diversification Opportunities for Catena Media and Burford Capital
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catena and Burford is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and Burford Capital Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital 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 Burford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burford Capital has no effect on the direction of Catena Media i.e., Catena Media and Burford Capital go up and down completely randomly.
Pair Corralation between Catena Media and Burford Capital
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Burford Capital. In addition to that, Catena Media is 2.17 times more volatile than Burford Capital Limited. It trades about -0.22 of its total potential returns per unit of risk. Burford Capital Limited is currently generating about 0.07 per unit of volatility. If you would invest 103,500 in Burford Capital Limited on September 2, 2024 and sell it today you would earn a total of 2,600 from holding Burford Capital Limited or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media PLC vs. Burford Capital Limited
Performance |
| Timeline |
| Catena Media PLC |
| Burford Capital |
Catena Media and Burford Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Burford Capital
The main advantage of trading using opposite Catena Media and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Burford Capital 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 Burford Capital will offset losses from the drop in Burford Capital's long position.| Catena Media vs. Uniper SE | Catena Media vs. Mulberry Group PLC | Catena Media vs. London Security Plc | Catena Media vs. Triad Group PLC |
| Burford Capital vs. Catalyst Media Group | Burford Capital vs. Catena Media PLC | Burford Capital vs. Hollywood Bowl Group | Burford Capital vs. Indutrade AB |
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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