Correlation Between Catena Media and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Catena Media and Cornish Metals 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 Cornish Metals 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 Cornish Metals, you can compare the effects of market volatilities on Catena Media and Cornish Metals 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 Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Cornish Metals.
Diversification Opportunities for Catena Media and Cornish Metals
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catena and Cornish is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals 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 Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Catena Media i.e., Catena Media and Cornish Metals go up and down completely randomly.
Pair Corralation between Catena Media and Cornish Metals
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Cornish Metals. In addition to that, Catena Media is 1.22 times more volatile than Cornish Metals. It trades about -0.03 of its total potential returns per unit of risk. Cornish Metals is currently generating about 0.04 per unit of volatility. If you would invest 760.00 in Cornish Metals on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Cornish Metals or generate 11.84% 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. Cornish Metals
Performance |
| Timeline |
| Catena Media PLC |
| Cornish Metals |
Catena Media and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Cornish Metals
The main advantage of trading using opposite Catena Media and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Cornish Metals 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 Cornish Metals will offset losses from the drop in Cornish Metals' 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 |
| Cornish Metals vs. United Internet AG | Cornish Metals vs. Verizon Communications | Cornish Metals vs. Fulcrum Metals PLC | Cornish Metals vs. Power Metal Resources |
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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